Snowball or avalanche: how to order debt repayments

Choosing a payment order does not remove minimum obligations. Both methods use a shared budget, maintain minimum payments and direct the remainder to a priority debt. A useful comparison shows interest, payoff order and duration under matching conditions.

What differs between the methods

Snowball prioritises the smallest balance to close a debt sooner. Avalanche prioritises the highest rate to reduce interest cost. If the smallest debt also has the highest rate, both methods can coincide. Do not assume one always finishes sooner: strategies can end in the same month while paying different interest.

Prepare a budget you can sustain

Record each balance, rate and minimum payment, plus a monthly budget you can sustain. The tool totals minimums and rejects insufficient budgets. Once a debt closes, its payment is reused within the same budget, not treated as additional money. Preserve room for essential spending and check with lenders how extra payments are applied.

Read results without promising dates

The model applies monthly interest as nominal yearly rate divided by twelve, pays minimums and allocates the surplus. Rates and minimums stay constant; fees and new borrowing are excluded. The horizon is 1,200 months. Failure to clear debt within it is a simulation limit, not a real payoff date or a refinancing recommendation.

Hypothetical example, not a forecast

The amounts are invented examples. They are not current prices or personalised recommendations.

Example inputs

Approximate results

A common question

What if my budget does not cover minimums?

The tool cannot produce a valid schedule. Check the inputs and seek suitable help for your situation; changing methods does not resolve the shortfall.

Try these inputs and compare different assumptions in the calculator.