Debt Snowball vs. Debt Avalanche

by | Feb 7, 2015

If you are looking to get out of debt as quickly as possible, you have two major strategies to choose from if you are looking for a general plan. The Debt Snowball involves paying down the smallest accounts on your books while the Debt Avalanche involves paying down accounts with large interest rates first. Here we will look at the advantages and disadvantages of each and also tell you when a completely different strategy is advisable.

Advantages of the Debt Snowball

This payoff technique is a great way to keep yourself in the game psychologically as well as financially. If you focus on playing down the smallest accounts first, you will be able to quickly get rid of some of your bills such as credit card debt. However, larger debts such as student loans will remain on your books for a long time accumulating interest.

If you have a steady source of income that you feel will remain steady for the next few years, you should be focusing on reducing the total amount of creditors on your books. You may be able to afford the organizational advantages that the debt snowball provides you are the expense of leaving bigger accounts alone. It is a Great way to keep from missing bills and being charged late fees and penalties from overlooking a mailing or missing a digital alert.

Advantages of the Debt Avalanche

The avalanche is a great way to pay down your debts if you are looking to get rid of large accounts such as your student loans first. This can be a great way for people to keep their head in the game by reducing the total amount of debt quickly. The Avalanche is a great way to proceed for people who do not have a large number of creditors, rather, they have sizable debt interspersed between a small number of creditors.

The Avalanche is great for reducing the amount of time that you are paying down debt. If you are not sure that you will have the same source of income in five years, then this may be the strategy for. It pays down interest more quickly so that you can free yourself to open up new avenues of income without having to worry about incurring late fees and penalties.

Advantages of Other Strategies (Debt Consolidation)

Both of the above strategies are ways to organize your debt if you have multiple creditors. However, it may be advisable to simply consolidate your debts into a single creditor so that you do not have to live by your debt payoff planner.

Debt consolidation may be an option if you are looking at a default at one or more of your debtor accounts. If you have a large amount of credit card debt or other unsecured debt that is in danger of ruining your long-term finances, you may want to adjust your debt payoff planner to include this strategy.

Most debt consolidation is only available for people who are in more serious financial trouble. For instance, many consolidation firms have a minimum of $10,000 that you must be in debt before they will qualify you for their program. Consolidation also ends up costing more than either of the previous two strategies; however, you will receive the best deal on your monthly payments.

Photos by HikingArtist


  1. David

    Facing a debt crisis and having to start again at my age (49) is very challenging. I am stunned at some of the fundamental lessons I seem to have missed but I am also lucky enough to be earn a very decent salary.
    Your accompanying thoughts and advice mean so much.
    Thank you.

  2. Rado

    This app is a massive help, both practically and mentaly, if your in depth try it.

  3. Dan Moore

    If all my interest rates are the same should I pay highest debt first 6,890 at 23% instead of snowball especially if they are card’s I intend to keep. I have cut the rest up anyway and the rest I can payoff easily if I get this massive monthly debt gone first

    • Moneyball

      List all debts smallest to largest. Pay off smallest debts first. You will have sense of accomplishment. Don’t focus on interest rates.

  4. Ralph

    This is a great spp

    • Lila karakas

      That’s the best app so happy colours and bright. So helpfull

  5. Twitter-cve

    Facing a debt crisis and having to start
    again at my age (49) is very challenging. I am stunned at some of the fundamental lessons I seem to have missed but I am also lucky enough to be earn a very decent salary.
    Your accompanying thoughts and advice mean so much.

  6. Romario

    Love the app!

  7. Matt

    I really like how this app gives you multiple strategies to help you figure out what will benefit you the most.

    I got about $55000 I need to work through and for the first time i feel like I have a clear way to work it down.

  8. Chris

    Thank you so much for this app! I have a path which I can follow and now, i can see the light at the end of the tunnel! Thank you!

  9. Jack

    Nice app

  10. Maureen

    The idea of having less accounts to pay monthly is encouraging. We sometimes miss payments because of the number of payments we have to make monthly. This app helps a lot with keeping track and knowing exactly how much to pay for each account.

  11. Karen

    I have been looking for this took for several months. Finally one that is user friendly and colorful! I printed and out ok n a big poster board . A head on accident outnua I. Major debt at age 54 and 60. Now we can head into retirement debt free as ournfirstplan was thank you!

  12. Karen

    If I have extra money that I can put half in savings and use the other 1/2 on a credit card which card do I pay it on first? Highest or lowest balance or highest apr. it is not enough to pay off any 1 all together

    • Beth

      I pay on the smallest balance first. Getting it paid off quickly really helps my moral!

  13. ingemar Francisca

    Thank you so much for this tool! Unfortunately this is my second time in depth. The first time It took me a little over 10 years to consolidate 20.000 euro of depth. I wish I had your tool 16 years ago. This time it will take me a little over 1 year to consolidate a dept of 20.000. I’m so happy! Not because I’m in dept of course ;). But because, thanks to your app, I have a plan and strategy. At this moment I’m studying to become a budget coach so I can give back to society by helping others. Is your tool also available for companies? Where I can have access to more than one account at the time? Or do I have to open an account for each of my clients? Thanks you so so much. And I love the new changes you guys made recently! Good luck with all your endeavors!

  14. Yvette

    I absolutely love this app! It’s a sensible and practical approach to paying debts. Thank you so much!


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