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Compare the snowball and avalanche strategies side by side. See payoff order, months to debt-free, and total interest for each method.
Amount above minimum payments to accelerate payoff
Avalanche Method (mathematically optimal):
Pay minimums on all debts, apply extra payment to the highest interest rate debt first.
Snowball Method (psychologically motivating):
Pay minimums on all debts, apply extra payment to the smallest balance first.
Avalanche minimizes total interest paid. Snowball delivers quick wins that keep you motivated.
The avalanche method targets the highest interest rate debt first while making minimum payments on all others. This is mathematically optimal — it minimizes total interest paid and gets you out of debt faster than snowball in most cases.
The snowball method targets the smallest balance first regardless of interest rate. Paying off small debts quickly provides psychological wins and momentum. Research shows people who use this method are more likely to follow through with their payoff plan.
Avalanche almost always saves more in total interest because it eliminates high-rate debt faster. However, the difference may be small, and if snowball's quick wins keep you motivated and on track, the practical outcome may be better.
Even $100 extra per month on a $10,000 credit card at 20% APR can save over $2,000 in interest and cut years off your payoff timeline. The earlier the extra payment, the greater the impact due to compound interest.
Compare the guaranteed return of paying off debt (equal to the interest rate) against expected investment returns. High-interest debt above 7-8% should generally be paid off first. Always capture any employer 401(k) match before aggressively paying debt — that match is an instant 50-100% return.