Debt Snowball vs Debt Avalanche
The debt snowball method pays off the smallest balance first to build motivation through quick wins. The debt avalanche method pays off the highest-interest debt first to save the most money overall. The avalanche is mathematically cheaper, but the snowball can be easier to sustain. Choose the method you can stick with, and keep secured debts current throughout.
Key Points
- Snowball targets the smallest balance first for motivation.
- Avalanche targets the highest interest first to save money.
- Avalanche is cheaper; snowball can be easier to sustain.
- Keep secured debts current under either method.
How the snowball works
With the snowball method, you pay the minimum on all debts and put any extra money toward the debt with the smallest balance. Once that is cleared, you roll the payment into the next-smallest balance, and so on.
The psychological wins of clearing accounts quickly can help you stay motivated, which is why this method suits people who respond to visible progress.
How the avalanche works
With the avalanche method, you pay the minimum on all debts and put any extra money toward the debt with the highest interest rate. Once that is cleared, you move to the next-highest rate.
This method minimises the total interest paid and is mathematically the cheapest path to becoming debt-free.
Which should you choose?
If you are motivated by numbers and want to save the most, choose the avalanche. If you struggle to stay motivated and need quick wins, choose the snowball. The best method is the one you will actually stick with.
Under either method, always keep secured debts (home and car) current to protect your assets. If you cannot meet all minimums, you may be over-indebted and should seek a financial assessment.
Frequently Asked Questions
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Reviewed by Carolina Guevara Harris
Registered Debt Counsellor · NCRDC3152
Last updated: 17 September 2025
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