Debt Avalanche vs Snowball: Which Method Saves More?

Both methods begin with the same foundation

Keep making at least the required payment on every debt. Direct the remaining monthly budget to one target. When that debt is cleared, roll its payment into the next target rather than allowing the monthly debt budget to shrink.

The avalanche targets the highest annual percentage rate. The snowball targets the smallest balance. If all payments are made exactly as planned, the avalanche usually costs less because it attacks the most expensive balance first.

A worked example

Imagine a £3,000 balance at 8% with a £100 required payment and a £10,000 balance at 24% with a £250 required payment. The total monthly debt budget is £650 and no new borrowing occurs.

In this simplified example, the avalanche saves about £611 and finishes one month earlier. Different balances, rates and minimums can narrow or widen the gap.

Why someone might still choose snowball

Closing an account quickly creates visible progress and reduces the number of monthly payments. If that motivation is what keeps the plan running, it can matter more than a modest modelled saving. A cheaper plan that is abandoned is not cheaper in practice.

Important exceptions

Promotional rates, deferred-interest deadlines, secured debts, tax consequences and debts already in arrears can change priority. Keep enough cash for essential costs and contact creditors early if payments are unaffordable. The calculator compares repayment order; it does not replace regulated debt advice.

Recalculate whenever an interest rate, minimum payment or available monthly budget changes. The comparison assumes that cleared-account payments are fully rolled forward and that no new balances are added. If either assumption breaks, the real payoff date and saving will differ.

Related calculators