Debt Snowball vs. Debt Avalanche: Which One Wins (Shown in the Calculator)

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People argue about the snowball and the avalanche like it's a personality test. It isn't. In this video I put the same four debts into a debt snowball calculator twice: once ordered smallest balance first, once ordered highest interest rate first. Then I let the numbers settle it and show you the extra monthly payment box most people skip, which on this example did more than either method by itself.

Then I show you the one setting most people skip, the extra monthly dollar amount box, which on this example did more than either method by itself.

What you'll learn

• How the snowball method orders your debts and why some people prefer it
• How the avalanche method orders the exact same debts differently
• How to enter your balances, rates and minimum payments in the calculator
• What each method saved in interest and in months on a sample $37,000 of debt
• Why the extra payment box is the biggest lever on the whole page

The example I used

I built four debts that look like what most people actually carry: a $2,000 credit card at 20% with a $100 minimum that takes 25 months to clear, a $6,000 personal loan at 14% with a $164 payment that takes 48 months, plus an $8,000 debt and a $21,000 used car loan. Total debt is about $37,000 and the combined monthly payment is $889. The longest debt runs 87 months.

Snowball method basics

The snowball says list your debts smallest balance to largest: $2,000, then $6,000, then $8,000, then $21,000. You pay minimums on everything and throw everything you can at the smallest one. When the $100 payment frees up, it rolls onto the $164, so that debt now gets $264. When that one clears, $264 rolls to the next. The payments move down the line — hence the snowball. For a lot of people the win is psychological: a debt actually disappears early.

Avalanche method basics

The avalanche changes exactly one thing: the order. You list by interest rate, highest first — the 25% card leads, then 20%, then on down. Same minimums, same total monthly payment, same rolling of freed-up money. You're just aiming the freed-up dollars at the most expensive debt instead of the smallest one.

What the calculator showed

Doing nothing but making the payments as they come due, that $37,000 runs 87 months and costs roughly $16,000 in interest. Snowball drops it to about $13,000 in interest and 57 months — a savings of $2,779 and 30 payments, with no extra money added. Avalanche on the same debts saved right around $3,000, also 30 fewer payments. So the avalanche came out $300 to $400 ahead, with the timeline about the same.

Look up at a hill and you'll see a snowball and an avalanche. One does more damage faster. That's the avalanche. But the gap here is a few hundred dollars, which is why I tell people to run both.

The tip that beat both methods

There's a box for an extra monthly dollar amount. I changed $889 to $989 — one hundred dollars — and the plan saved roughly another $3,000 and another 9 months. That one hundred bucks did more than the choice between the two methods did. Try both orderings with the debt snowball calculator and the debt avalanche calculator, then add whatever extra you can actually sustain.

Key steps

1. Write down every debt: balance, interest rate, and minimum payment.
2. Enter them smallest balance first and hit calculate. Note the interest and months saved.
3. Re-enter them highest interest rate first and calculate again.
4. Compare the two savings numbers side by side.
5. Add an extra monthly amount you can really afford and recalculate.
6. Pick the plan you'll stick with and follow the month-by-month payment schedule it prints.

FAQ

Which method saves more money?

In my example the avalanche won by about $300 to $400 in interest, with roughly the same payoff date. The avalanche will generally win on pure math because it kills your highest rate first. Whether that gap is worth it to you is the real question.

Do I need extra money to use either method?

No. Both plans assumed the same $889 a month I was already paying. The savings come from rolling freed-up payments onto the next debt instead of letting that money drift away. If you do have extra, the payoff calculator guide shows how much faster it gets.

How do I turn a snowball calculator into an avalanche calculator?

Change the order you type the debts in. List highest interest rate first instead of smallest balance first, then calculate. That's the only difference between the two methods. You can see more plans on the free calculators page or start the get out of debt course.

How do I enter my debts in a debt snowball calculator?

Write down every debt with its balance, interest rate and minimum payment. Enter them smallest balance first, hit calculate and note the interest and months saved. In my example that was four debts totaling about $37,000 with a combined monthly payment of $889. The calculator then prints a month-by-month payment schedule you can follow.

What does adding $100 a month do to a debt payoff plan?

In my example I used the extra monthly dollar amount box to go from $889 to $989 a month. That saved roughly another $3,000 in interest and another 9 months. That hundred dollars did more than picking between snowball and avalanche, which were only about $300 to $400 apart on the same debts.