How the two strategies work
Both methods start the same way: pay every minimum, then throw everything spare at one target debt. When a debt dies, its minimum rolls onto the next target, so your total monthly amount never drops. The only difference is the order. The avalanche targets the highest interest rate first, which always costs the least in total. The snowball targets the smallest balance first, which gets you your first "paid off" quicker and keeps you motivated.
I built this so you don't have to take anyone's word for which is better for you. Enter your actual debts and look at the gap. Sometimes the avalanche saves serious money. Sometimes it's twenty quid and a year of willpower, and the snowball is the sane choice.
Worked example
Take three debts: a $4,000 credit card at 22% with an $80 minimum, a $9,000 car loan at 7.5% with a $200 minimum, and a $3,000 personal loan at 11% with a $90 minimum. Add $150 a month on top, $520 in total. The avalanche clears everything in 42 months with $2,786.68 of interest. The snowball takes 45 months and $3,451.20. The avalanche saves $664.52 here, and both destroy paying minimums alone.
Frequently asked questions
Should I use the snowball or the avalanche?
The avalanche always wins on the maths. The snowball wins on morale. Run both above and look at the gap: if it's small, pick the one you'll stick to.
What happens to a minimum payment when a debt is cleared?
It rolls onto the next target, so your total monthly amount stays the same until everything is gone. That rolling effect is where both methods get their power.
Should I include my mortgage?
Usually not. A big low-rate debt with decades left distorts the plan. This works best for cards, car loans, and personal loans.