How to pay off debt: snowball vs avalanche
What you'll learn
Learn the two main ways to order debt repayment - snowball and avalanche.
To clear several debts at once, keep paying the minimum on all of them, then throw every spare pound at one chosen debt until it is gone. The only question is which debt comes first. Two methods answer it.
The two methods
- Snowball - pay the smallest balance first. You clear whole debts quickly, which feels good and keeps you going.
- Avalanche - pay the highest interest rate first. This cuts the most total interest, so it is cheaper in pure maths.
Once the target debt is cleared, you roll its payment onto the next debt. The amount you throw at each debt grows as you go, which is where the "snowball" picture comes from.
Snowball vs avalanche
| Method | Pay first | Strength | Trade-off |
|---|---|---|---|
| Snowball | Smallest balance | Quick wins, momentum | Can cost a little more interest |
| Avalanche | Highest rate | Saves the most interest | Slower first win, harder to stick with |
Which should you pick?
The maths favours the avalanche. Human nature often favours the snowball, because a plan you finish beats a cheaper one you quit.
If high-cost debt is doing real damage, the avalanche protects your wages fastest. If you have stalled before and need momentum, the snowball gets you moving. The best method is the one you will actually stick to.
Key takeaways
- Keep minimums on all debts, then attack one target with every spare pound.
- Snowball clears the smallest balance first for quick, motivating wins.
- Avalanche clears the highest rate first and saves the most total interest.
- The right choice is the method you will stick with to the end.
Illustrative only: shows the priority order each method gives across three sample debts, not real balances or rates. Your own debts and rates will differ. Not a forecast.
Frequently asked questions
Which method clears debt cheaper?
The avalanche, in pure maths, because it attacks the highest interest rate first and so cuts the most total interest. The snowball can cost slightly more but is easier to stick with.
Why would anyone choose the snowball?
Because momentum matters. Clearing a whole small debt early gives a visible win that keeps many people motivated, and a plan you actually finish beats a cheaper one you abandon.
Can I combine the two?
Yes. Some people clear one tiny balance first for the morale boost, then switch to attacking the highest rate. The best method is the one you will stick to.
General information, not financial advice. The value of investments can fall as well as rise, and figures and rules can change; check the current position before acting.