Compare debt payoff strategies and find the fastest way to become debt-free. Choose between the avalanche method (highest interest first) or snowball method (smallest balance first).
Total Balance:
$18,000.00
Total Minimum Payment:
$550.00
Additional amount to pay each month beyond minimum payments
Avalanche Method
Time to Payoff:
2 years, 9 months
Total Interest:
$3,203.68
Total Paid:
$21,203.68
Snowball Method
Time to Payoff:
2 years, 9 months
Total Interest:
$3,203.68
Total Paid:
$21,203.68
Avalanche Method: Pays off debts with the highest interest rates first, minimizing total interest paid.
Snowball Method: Pays off smallest balances first, providing psychological wins and motivation.
Understanding Debt Payoff Strategies
Avalanche Method (Highest Interest First)
The avalanche method prioritizes debts with the highest interest rates. While making minimum payments on all debts, you apply any extra funds to the debt with the highest interest rate. Once that debt is paid off, you move to the next highest rate. This method minimizes the total interest you'll pay over time, making it the most cost-effective approach.
Snowball Method (Smallest Balance First)
The snowball method focuses on paying off the smallest balances first. While making minimum payments on all debts, you apply extra funds to the debt with the smallest balance. Once paid off, you move to the next smallest debt. This method provides quick wins and psychological motivation as you eliminate debts faster, even though you may pay slightly more interest overall.
Which Method is Right for You?
The avalanche method saves you the most money in interest, making it the mathematically optimal choice. However, the snowball method can be more motivating if you need the psychological boost of quick wins. Many people find success with the snowball method because the momentum and motivation help them stick to their debt payoff plan. Use this calculator to compare both strategies and see which one works best for your situation.
