Which is better, Debt Snowball or Debt Avalanche?

Debt Avalanche is mathematically superior as it saves the most interest, but Debt Snowball is often better for psychological motivation by providing early wins.

Should I pay off debt or invest?

If your debt interest is higher than ~7%, payoff is usually better. If it is lower (like a 3% mortgage), investing may provide a better long-term return.

Debt Payoff Calculator - Snowball vs Avalanche

What is the Debt Snowball method?

The Debt Snowball method involves paying off your smallest debts first to build momentum. While mathematically not the most efficient (you might pay more interest), the psychological wins often help people stick to the plan longer.

What is the Debt Avalanche method?

The Debt Avalanche method involves paying off the debt with the highest interest rate first. Mathematically, this saves you the most money over time.

How to use this calculator?

Enter your total debt balance, average interest rate (APR), and how much you can afford to pay each month. Experiment with increasing the "Monthly Payment" slider to see how even $50 extra can shave months off your debt freedom date.

Frequently Asked Questions

Should I invest or pay off debt?

Generally, if your debt interest rate (e.g., credit card at 20%) is higher than your expected investment return (e.g., market at 7%), you should pay off the debt first. It's a guaranteed "return" on your money.

Snowball vs. Avalanche: Which is Right for You?

Choosing a debt payoff strategy is as much about psychology as it is about math. While both methods work, they appeal to different types of borrowers.

The Snowball ❄️

Focus on the smallest balance first, regardless of interest rate.

Best for: Psychological motivation
Pros: Early wins, easier to stick to
Cons: May pay more interest over time

The Avalanche 🏔️

Focus on the highest interest rate first, regardless of balance.

Best for: Mathematical efficiency
Pros: Saves the most money, fastest total time
Cons: May take longer to see individual accounts close

Expert Tips to Accelerate Your Payoff

Regardless of your method, these three tips can save you thousands:

Balance Transfers: Moving high-interest credit card debt to a 0% APR transfer card can give you 12-21 months of interest-free growth.
Automation: Set up a "fixed" payment rather than a percentage. As your balance drops, more of that fixed amount will go toward principal.
Life Hack: Use this calculator to see how adding just $50 to your monthly payment changes your "Freedom Date." The result is often shocking.