Debt Snowball vs Avalanche Example

Use this calculator if...

The snowball calculator is the focused page for smallest-balance-first payoff estimates.

• You want smallest-balance-first order Use the snowball calculator when the estimate should target the smallest balance first.
• You have multiple debts The method comparison needs balances, APRs and minimum payments for each listed debt.
• You want a payoff schedule estimate The calculator estimates payoff order, payoff date and interest under the assumptions entered.

Input assumptions explained

Use the same assumptions when comparing snowball and avalanche.

• Debt balance Snowball order uses balance size. Avalanche still uses balance to calculate interest and payoff timing.
• APR Avalanche order uses highest APR first. Both methods calculate interest from the APR entered.
• Minimum payment Minimum payments are applied to active debts before extra payment is directed to the target debt.
• Extra monthly payment Use the same extra amount in both calculators if you want a fair method comparison.
• New charges The estimates generally assume no new charges, fees or changing APRs unless the calculator says otherwise.
• Freed-up payments When a debt is paid off, its minimum payment is redirected to the next target in the estimate.

Worked example

Suppose there are three debts: 800 at 12%, 2,500 at 24% and 5,000 at 9%. The methods choose different first targets.

Debt A

800 at 12%

Snowball targets this first because it has the smallest balance.

Debt B

2,500 at 24%

Avalanche targets this first because it has the highest APR.

Debt C

5,000 at 9%

This debt is larger but has the lowest APR in the example.

Snowball order

Smallest balance first

The order starts with 800, then redirects payments after payoff.

Avalanche order

Highest APR first

The order starts with the 24% APR debt.

Comparison basis

Same extra payment

Use the same extra payment to compare payoff time and interest.

With the same extra monthly payment, the two estimates can have different payoff order, payoff dates and total interest.

Result interpretation

Read the result as a scenario based on the assumptions entered, not as a decision rule.

Common mistakes

These are common ways an estimate can become cleaner than the real-world scenario.

• Changing inputs between methods Use the same debts and extra payment when comparing snowball and avalanche.
• Leaving out minimum payments A missing or too-low minimum payment can make a payoff estimate unrealistic or impossible.
• Adding new charges outside the estimate New spending, fees or rate changes can make the schedule differ from the calculator output.
• Reading method output as advice The guide explains payoff-order estimates. It is not debt counselling or a recommendation.

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What to try next

Use the next step that matches the question you want to answer.