PayoffHarbor · A practical comparison guide
Avalanche and snowball both keep minimum payments in the plan and focus the remaining budget on one debt at a time. The difference is how you choose that target: the highest APR or the smallest balance.
The CFPB describes both approaches and notes that neither is better for everyone. It suggests weighing their tradeoffs and choosing a method that helps you stay motivated. Read the CFPB Debt action plan.
Avalanche · highest APR first
Pay at least the minimum on every debt. Then put the rest of your monthly debt budget toward the balance with the highest APR. Once it is paid, move that payment to the remaining debt with the next-highest APR.
When balances, rates, fees, and payment budget are otherwise held the same, this method may reduce estimated interest because more of the extra payment goes to a higher-rate balance sooner.
Snowball · smallest balance first
Pay at least the minimum on every debt. Direct the rest of the monthly debt budget to the smallest balance, regardless of APR. After it is paid, roll its payment to the next-smallest balance.
A smaller balance may reach zero earlier, creating a visible milestone that can help some people stay motivated. That early progress is not guaranteed, and the method may cost more interest when a larger balance has a higher APR.
A fair side-by-side comparison
Comparing one plan with a larger payment would mix the effect of the strategy with the effect of paying more. Use the same total amount and starting information for both.
For each debt, write down its current balance, APR, and required minimum payment. Use the same starting figures for both comparisons.
Set the total amount you can put toward all listed debts each month. This budget includes the minimums; it is not an extra amount on top of them.
In both plans, make the minimum payments first and direct any remaining budget to the strategy’s current target. Keep the total monthly payment the same in both runs.
When a debt is paid off, add the full payment amount that had gone to it to the next target’s payment. Continue the same process until the listed debts are paid.
Review estimated interest, payoff timing, and when each balance reaches zero. Check that rates, fees, minimum-payment assumptions, and payment timing are consistent across both plans.
The tradeoff
Avalanche may lower estimated interest when the other inputs are the same. Snowball may bring an earlier payoff milestone that supports motivation. Neither method is universally best; the order you are more likely to keep following may matter to you.
Want to compare your own inputs? Open the payoff planner.