Debt snowball or avalanche: which order to pay off your debts
When you have several debts at once (a credit card, a car loan, a buy-now-pay-later plan), it's easy to feel you're paying a lot and getting nowhere. A clear order almost always helps more than paying a bit of everything depending on the month.
This article is for information only and is not financial advice. If your debts feel unmanageable, seek free professional debt advice as early as possible.
Start with the full list
Write down each debt with three numbers: what's left to pay, the annual interest rate (APR) and the minimum payment. Many people discover here that a small debt has a very high rate, or that they've been paying mostly interest for months.
Both methods share one rule: always pay the minimum on every debt, and put everything extra towards just one. When it's gone, its payment rolls into the next one.
The avalanche method
You tackle the debt with the highest interest rate first. On paper, this is the method that costs you the least interest overall and gets you debt-free soonest.
The snowball method
You tackle the debt with the smallest balance first, whatever its rate. You pay a little more interest, but debts disappear sooner, and watching them go is very motivating.
An example
- Credit card: 1,200 at 22%.
- Car loan: 6,000 at 7%.
- Personal loan: 800 at 11%.
With the avalanche, extra money goes to the credit card first, the most expensive one. With the snowball, it goes to the 800 personal loan, which will be gone in a few months. Either way, the car loan comes last.
Which one to choose
If you struggle to stick to plans, the snowball often works better: a method you follow beats a perfect one you abandon. If you're consistent and the rate differences are large, the avalanche saves you money. You can also mix them: clear one tiny debt first, then go by interest rate.
What ruins everything
- Missing a minimum payment: late fees and a damaged credit record cost more than any method saves.
- Still using the card while paying it off.
- Having no buffer at all: the first surprise expense goes straight back on the card.
MonVault's debt planner runs this comparison for you: enter your debts with their rate and minimum payment, pick snowball or avalanche, and see how many months it would take and how much interest you'd pay with each method. See everything it includes.
