Debt Snowball vs. Avalanche Calculator

Compare two popular strategies to find the fastest path to being debt-free.

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Debt Snowball

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Debt Avalanche

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Psychology vs. Math: The Great Debt Debate

Getting out of debt isn't just about numbers; it's about behavior. That's why two primary strategies have emerged, each catering to a different mindset.

The Debt Snowball: For Motivation

Popularized by financial guru Dave Ramsey, the Debt Snowball method is all about building momentum. You list your debts from the smallest balance to the largest. You make minimum payments on everything, but throw every extra penny at the smallest debt. Once it's paid off, you feel a huge sense of accomplishment! You then take the money you were paying on that debt (its minimum payment plus your extra payment) and "roll" it onto the next smallest debt. This creates a "snowball" of money that grows larger as you knock out each debt, keeping you motivated to the finish line.

The Debt Avalanche: For Maximum Savings

The Debt Avalanche method is the mathematician's choice. You list your debts by the highest interest rate (APR) down to the lowest. You make minimum payments on all debts, but focus your extra payments on the one with the highest interest rate. This approach tackles the most expensive debt first, which means you'll pay less in total interest over the life of your loans. While you might not get the quick wins of the Snowball method, this strategy is guaranteed to save you the most money and get you out of debt faster.

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Frequently Asked Questions

Which method is better for me?

It depends on you. If you need small, frequent victories to stay motivated and stick with a plan, the Debt Snowball is likely a better fit. If you are highly disciplined and your main goal is to save the maximum amount of money, the Debt Avalanche is the mathematically superior choice. This calculator shows you the exact numbers so you can decide which trade-off you're willing to make.

What happens to the minimum payment when a debt is paid off?

This is the key to both strategies! Once a debt is paid off, you don't use its minimum payment for other expenses. You add that freed-up amount to your extra payment (your "snowball" or "avalanche") and apply it to the next targeted debt. This accelerates your progress significantly.

Can I switch strategies partway through?

Yes, you can. Some people start with the Snowball method to get a few quick wins and build confidence, then switch to the Avalanche method to save more on interest once they have momentum.