Debt payoff plan: snowball vs avalanche

Whether you’re juggling a couple of cards or a stack of loans, you need a simple order and a rough timeline. This guide walks through the two classic strategies and how to model them with a calculator.

Step 1: List your debts in one place

Before you worry about strategies, get everything in one list. For each debt, write:

Current balance
Interest rate (APR)
Minimum monthly payment
Type (credit card, personal loan, student loan, etc.)

This is exactly the information you’ll plug into the loan payoff calculator.

Step 2: Pick your payoff strategy: snowball vs avalanche

Debt snowball (smallest balances first)

With the snowball method, you:

Pay minimums on all debts.
Throw any extra money at the smallest balance first.
Once it’s gone, roll that payment into the next smallest, and so on.

This usually gives you the fastest feeling of progress because you knock out whole accounts quickly.

Debt avalanche (highest interest first)

With the avalanche method, you:

Pay minimums on all debts.
Throw extra money at the highest interest rate first.
When that’s gone, move to the next highest rate, and so on.

This usually saves the most money over time, because you attack the expensive interest first.

Step 3: Decide how much you can pay each month

Look at your estimated take‑home pay and basic expenses (rent, utilities, food, transport). Decide how much you can realistically commit to debt every month without destroying your ability to live.

That “extra” amount on top of your minimum payments is what drives your payoff speed. The calculator needs this number to model your timeline.

Step 4: Model your plan with the Loan Payoff calculator

Once you have your list of debts and a monthly budget:

Open the Loan & Debt Payoff calculator.
Enter each debt’s balance, rate, and minimum payment.
Choose snowball (smallest balance) or avalanche (highest rate).
Enter your total monthly amount available for debt.
Run the calculation to see payoff order, timeline, and interest paid.

You can run it twice — once for snowball, once for avalanche — and compare how the timeline and total interest change.

Which strategy should you choose?

There isn’t one right answer. As a rough rule of thumb:

Choose snowball if motivation is your main problem and you need quick wins.
Choose avalanche if you’re disciplined and mainly want to minimize interest.
You can also do a hybrid: start snowball to clear a few small debts, then switch to avalanche.

Step 5: Make it sustainable

A payoff plan only works if you can stick to it. A few ideas:

Keep at least a tiny buffer for emergencies so you don’t immediately re‑borrow.
Automate the minimum payments where possible.
Set calendar reminders to re‑run the calculator every few months as balances change.

This page is for planning only — not professional advice. Interest rates, fees, and local rules all matter. Talk to a qualified advisor for advice tailored to you.

How to plan a debt payoff strategy (snowball vs avalanche)