Debt Avalanche vs. Snowball
Compare paying off multiple debts by highest interest rate first (avalanche) versus smallest balance first (snowball), for the same monthly budget.
Minimums total $520/month.
Avalanche: months to payoff
27
Avalanche: total interest
$2,557
Snowball: months to payoff
27
Snowball: total interest
$2,871
Avalanche order: Credit Card → Personal Loan → Car Loan
Snowball order: Personal Loan → Credit Card → Car Loan
How it works: every debt gets at least its minimum payment each month; the rest of the budget (plus minimums freed up as debts are paid off) goes to whichever debt is first in the strategy's order.
Avalanche (highest rate first) minimizes total interest, mathematically. Snowball (smallest balance first) clears individual debts sooner, which research on behavior suggests can help with motivation — at the cost of somewhat more total interest.
Sources & further reading