Snowball or avalanche — what the choice costs

The avalanche method — paying the highest interest rate first — always costs less in interest than the snowball method, which pays the smallest balance first; the snowball’s advantage is motivational, and this model prices exactly what that motivation costs.

Worked example: with Total you can pay each month of 600, this model computes Months to debt free of 23. See the full breakdown.

✓ 3 self-test cases · assumptions shown No rates to go out of date · reviewed 2026-08-02

How debt payoff planner is worked out

There are two sensible orders to clear debts in. The avalanche pays the highest interest rate first, which is arithmetically optimal. The snowball pays the smallest balance first, which clears individual debts sooner and gives you visible wins. Both pay every minimum and throw the whole surplus at one target.

This model runs both simulations on your debts at once, month by month: it charges each balance its monthly interest, takes the minimums, and puts everything left on the current target until it clears. That is not something you can write in closed form — the allocation each month depends on where the balances landed the month before — so it is a real simulation, and you can read the whole schedule.

The useful output is the difference. On the sample debts, avalanche and snowball both finish in 23 months, but the snowball costs 112.56 more in interest. That is the honest way to frame the choice: the snowball is not wrong, it just has a price, and now you know what it is before choosing it.

Worked example

three debts totalling 11,500 on a 600 budget, avalanche — highest rate first
Total you can pay each month	600
Which debt gets the extra money	avalanche
Total owed today ✓	11500
Total Minimums ✓	265
Months to debt free ✓	23
Interest you pay ✓	1509.23
Clears In Horizon ✓	true
Payoff Order	Credit card → Car loan → Store card
Avalanche saves ✓	112.56

Every row is computed by the engine from the inputs above. Rows marked ✓ are additionally pinned by a published self-test vector.

Frequently asked questions

Which is better, the debt snowball or the debt avalanche?

Avalanche is always cheaper or equal in interest, because paying the highest rate first minimises what accrues. Snowball clears individual debts sooner, which many people find easier to stick to. Run both here on your own numbers — if the gap is small, the motivational method may well be the better one.

How much does the snowball method cost?

Only the interest difference, which this model computes exactly. On three debts totalling 11,500 with a 600 monthly budget, both strategies finish in 23 months and the snowball costs 112.56 more — a small price for the easier plan. On debts with wider rate gaps it can be much larger.

What happens if I only pay the minimums?

It stretches dramatically. The same 11,500 of debt takes 66 months instead of 23 and costs 5,876 in interest instead of 1,509 — nearly four times as much. Lower the monthly budget to the total of the minimums to see it.

Should I pay off debt or invest first?

Compare the debt’s interest rate with what you would realistically earn investing. Clearing a 24% credit card is a guaranteed 24% return, which almost nothing matches. For low-rate debt the comparison is closer — the FIRE planner is the other half of that decision.

Sources

Projection, not advice. The badge means the engine reproduces this model's own arithmetic through 3 self-test cases. It says nothing about whether the assumptions above will hold — nobody can verify a forecast. What this page offers instead is that every assumption is visible, editable, and traceable to the figure it moves.

Check the arithmetic yourself: how this calculator is verified — the formula behind every derived value, the 3 test cases the engine reproduces, and what the badge does and does not claim. Also available as machine-readable JSON.

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