Debt Snowball vs Debt Avalanche: How to Pick One
By Cedar & Ledger
If you have more than one debt, you've probably heard of two payoff methods: the snowball and the avalanche. Both work. The better one is the one you'll stick with. Here's how each works, what each costs you, and how to set one up in an afternoon. Only paying down one card? How to Pay Off One Credit Card shows the fixed-payment approach with example numbers. Working on student loans? How to Pay Off Student Loans Faster shows what a small extra payment can save. Paying down a personal loan? How to Pay Off a Personal Loan Early covers prepayment penalties and extra payments to principal.
The setup is the same for both
- List every debt. Write down the balance, interest rate (APR), and minimum payment for each one. For credit cards, How to Read a Credit Card Statement shows where to find them.
- Pick a monthly total. That's the amount you can put toward debt each month, including all the minimums. Be realistic. A number you can hit every month beats a big number you miss.
- Pay the minimum on everything. Then put whatever is left over toward one "target" debt.
- Roll it forward. When the target is paid off, its payment moves to the next debt. The amount you're throwing at debt grows as each balance goes away. What to Do After You Pay Off a Debt (Checklist) covers the checks to do the day a debt hits $0.
Want to see it month by month? How to Make a Debt Payoff Plan in a Spreadsheet shows how to set these four steps up as a payoff table with example numbers.
The only difference between the methods is the order of targets.
Snowball: smallest balance first
You put the extra money toward the smallest balance, no matter the interest rate.
- Upside: you clear whole debts sooner, and that's motivating. Fewer bills to track, and you can see progress.
- Downside: if a big balance carries a high rate, you pay more interest overall.
Avalanche: highest interest rate first
You put the extra money toward the debt with the highest APR.
- Upside: you pay the least interest and are usually done a little sooner.
- Downside: if the highest-rate debt is also big, it can take months before anything is fully paid off. Some people lose steam.
A quick example
Say you have $400 a month for three debts:
| Debt | Balance | APR | Minimum |
|---|---|---|---|
| Store card | $600 | 24% | $25 |
| Credit card | $3,200 | 22% | $80 |
| Car loan | $7,500 | 7% | $190 |
Here the snowball and avalanche orders are almost the same (store card, then credit card, then car), so the choice barely matters. That happens a lot. The gap gets real when your smallest debt has a low rate and a large debt has a high one. That's when it's worth running both numbers.
How to decide
- Have you started and quit before? Try the snowball. Early wins help.
- Are the rates far apart, like 29% vs 6%? The avalanche probably saves real money.
- Not sure? Run both and compare the payoff date and total interest. If the difference is small, choose whichever order feels better.
- Several credit cards? How to Pay Off Multiple Credit Cards (Example Numbers) runs both orders on a made-up three-card example.
- Getting a lump sum? A tax refund or bonus can go straight to your current target debt; What to Do With Your Tax Refund shows one order for splitting it.
Run the numbers
You can do this with pen and paper, but a spreadsheet makes it much easier to see what changes when you add $50 a month or reorder your targets. We made a Debt Snowball & Avalanche Planner for Excel and Google Sheets. You enter your debts once, and it shows both schedules side by side with a payoff date for each. It's $5. A free spreadsheet you build yourself works fine too. The important part is starting.
A few honest notes
- Keep a small cash buffer, even $500, so a surprise bill doesn't go back on a card.
- If you're behind on payments or the minimums don't fit, call your lender or a nonprofit credit counselor before picking a method.
- This is general information, not financial advice.
Cedar & Ledger makes plain, useful spreadsheet templates for money and small business. More at cedarandledger.vercel.app.
Try the free debt payoff calculator (snowball vs avalanche) →
Related template: read about the debt snowball template
See all Cedar & Ledger templates
Frequently asked questions
What does this guide cover?
How the debt snowball and debt avalanche methods work, what each costs, a worked example, and how to choose a payoff order and start.
What's the main idea?
Want to see it month by month? How to Make a Debt Payoff Plan in a Spreadsheet shows how to set these four steps up as a payoff table with example numbers.
Do I need a template to do this?
No. A notebook or a sheet you build yourself works fine. Cedar & Ledger also sells spreadsheet templates (I'd earn from a purchase); see the template box at the top of this page.
Is this financial advice?
No. It's general information with example numbers only, not financial, tax, legal or medical advice. Use your own numbers and check anything important with a qualified professional or the official source.