Snowball vs. avalanche: Find the debt payoff strategy that fits you best
Discover two proven ways to pay off debt — the snowball and avalanche methods — and take a brief quiz to find the strategy that may suit your money mindset.
Ready to pay off debt and take charge of your finances? That’s great! Now it’s time to find a clear strategy that can help you make consistent progress toward financial freedom.
There’s no right or wrong way to pay off debt. What matters most is finding a method that fits your lifestyle and keeps you motivated for the long haul.
Here, we’ll explore two common debt payoff strategies: the snowball method and the avalanche method.
What is the snowball debt payoff method?
The snowball debt payoff method is when you put as much money as possible toward your smallest debt balance while continuing to make minimum payments on your remaining debt. When the smallest debt is paid, take the money you were putting toward the payment and tack it onto your payment for the next smallest debt balance. Continue this process until all debts are paid.
With this strategy, your debt payments “snowball” into a larger payment over time, speeding up the time it takes you to pay off your debts and helping you build motivation through quick wins.
Coach’s note:
List all your outstanding debts from the smallest to largest balance first to get a clear picture of where to begin.
What is the avalanche debt payoff method?
The avalanche debt payoff method focuses on paying off debt with the highest interest rate first while continuing to make minimum payments on your remaining debt. When the highest interest rate debt is paid, take the money you were putting toward the payment and tack it onto your payment for the debt with the next highest interest rate. Continue this process until all debts are paid.
While this strategy typically takes longer, you could pay less over time by addressing higher-interest debt balances first.
Coach’s note:
List all your outstanding debts and make note of their interest rates from highest to lowest interest. You can find your interest rates on paper statements or when you log into your account for each debt.
Understanding the two debt payoff strategies
Here’s how the snowball and avalanche debt payoff methods might look in play using the following debts:
- $3,000 personal loan (12% APR)
- $5,000 credit card (25% APR)
- $8,000 auto loan (8% APR)
Snowball method: Pay more than the minimum monthly payment on the personal loan until it’s paid off (since it has the smallest balance) while making the minimum monthly payments on the remaining loans. Then prioritize the credit card followed by the auto loan.
Avalanche method: Pay more than the minimum monthly payments on the credit card until it’s paid off (since it has the highest interest rate) while making the minimum monthly payments on the remaining loans. Then prioritize the personal loan followed by the auto loan.
Which debt payoff strategy should you choose?
Swipe through these quick questions to find out which debt payoff approach best fits your current money mindset. Keep track of your answers to see your result.
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When tackling a big goal, I prefer:
A. Breaking it down to smaller milestones I can celebrate.
B. Sticking with a steady plan until the big goal is done.
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Progress feels most satisfying when:
A. I can see something checked off quickly.
B. I know my efforts add up to a bigger payoff down the road.
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When I look at my debts, I:
A. Want to clear a few right away to feel lighter.
B. Want to get rid of the ones with the highest interest to use my money efficiently.
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If I had multiple debts, I’d rather:
A. Pay off the smallest one first to build momentum.
B. Pay off the costliest one first to save money in the long run.
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To stay motivated, I need:
A. Visible signs of progress.
B. A clear long-term plan I can trust.
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When things take longer than expected, I:
A. Need constant reinforcement along the way to keep going.
B. Remind myself to be patient and trust the process.
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When I imagine being debt free, I think about:
A. The excitement of crossing each balance off the list.
B. The relief of paying less money when I cross the finish line.
Your debt payoff style
Add up your answers and review the results below to find your personal approach to paying off debts.
The snowball method
Paying off debt as quickly as possible appeals to your desire for making progress. By focusing on smaller debt balances first, you could build the momentum and confidence you need to become debt free, and each paid-off balance could help prove you’ve got what it takes to keep going. Keep track of your progress (a notes app on your phone could be helpful) to monitor your success every step of the way.
No matter which feels right for you, you’re already taking a positive step by choosing a debt payoff strategy and committing to it. Consistency is key — and every payment you make brings you closer to financial freedom, less financial stress, and the flexibility to focus on what matters most to you.
Takeaways and next steps
- The snowball debt payoff method focuses on getting rid of smaller debts first to build motivation through quick wins.
- The avalanche debt payoff method prioritizes debts with the highest interest rates to save money over time.
- There’s no single “right” way to pay off debt — the best approach is the one that fits your mindset and habits.
- Staying consistent is more important than which debt payoff method you choose.
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Ready to make a plan?
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