Avalanche vs Snowball: Which Debt Payoff Method is Best?
Two proven strategies to become debt-free faster
Debt Avalanche Method
How It Works
Pay minimum on all debts, then put extra money toward the debt with the highest interest rate. Once paid off, roll that payment to the next highest rate.
Pros
- • Saves the most money on interest
- • Mathematically optimal
- • Fastest payoff time
Cons
- • May take longer for first win
- • Requires discipline
Debt Snowball Method
How It Works
Pay minimum on all debts, then put extra money toward the smallest balance. Once paid off, roll that payment to the next smallest balance.
Pros
- • Quick wins for motivation
- • Psychological boost
- • Easier to stick with
Cons
- • May pay more interest
- • Not mathematically optimal