- What is the difference between the avalanche and snowball methods?
- Both pay the minimum on every debt and put anything spare into one target debt. Avalanche picks the highest interest rate, which costs the least overall. Snowball picks the smallest balance, which clears individual debts sooner and gives you visible wins earlier.
- Which method is actually cheaper?
- Avalanche, always, because interest is what makes debt expensive and it attacks the most expensive debt first. The gap can be anything from trivial to thousands depending on how far apart your rates are. This calculator shows the real difference on your figures rather than in the abstract.
- If avalanche is cheaper, why would anyone choose snowball?
- Because a plan you abandon costs more than a plan that is slightly suboptimal. Snowball clears whole debts faster, and for many people that early evidence of progress is what keeps them going. If your rates are close together, the extra cost is small enough that motivation is the better tiebreaker.
- Does the order matter if I only have one debt?
- No. With a single debt both methods do exactly the same thing: pay the minimum plus whatever else you can. The strategies only diverge once you have two or more debts competing for the same spare money.