Debt Avalanche vs Snowball Calculator
Compare Payoff Strategies
Formula
Both methods: Pay minimum on all debts + Apply extra to target debt
Avalanche: Target = Highest interest rate first
Snowball: Target = Smallest balance first
Frequently Asked Questions
What is the debt avalanche method?
The debt avalanche method involves making minimum payments on all debts, then applying extra payments to the debt with the highest interest rate first. This minimizes total interest paid and is mathematically optimal.
What is the debt snowball method?
The debt snowball method involves making minimum payments on all debts, then applying extra payments to the smallest balance first. While it costs more in interest, it provides quick wins that can boost motivation and increase the likelihood of sticking with the plan.
Which debt payoff strategy is better?
The avalanche method saves the most money on interest. However, research shows the snowball method can be more effective in practice because the psychological momentum of quickly eliminating debts keeps people motivated. Choose the method that you will actually stick with.
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