Debt Snow-Ball vs Debt Avalanche: Which Debt Pay Off Strategy is Right for You?

One of the ways to gain financial freedom is to be free from debt. But debt repayment isn’t always child’s play and it can take its toll on an individual if they don’t have the right plan in place to pay off what they owe. There are lots of approaches you can take when it comes to paying off your debt, but two have gained popularity and really stand out at the moment: debt snowball and debt avalanche. Both methods have proven to be useful in helping people pay off their debts, but one method may make your debt repayment easier than the other. The choice of which one to go for depends on your own circumstances, so let’s take a closer look at each one to help you decide which one is right for you.

1. Debt Snowball

For some, the debt snowball method is the best strategy because it put emphasis on paying off debt starting from the smallest amounts then gaining momentum to pay off the bigger ones. This strategy aims to get smaller debts out of the way and can be really motivating because you see debt clearing, giving you the momentum to keep going.


  • It helps you build motivation and confidence on your journey to debt repayment
  • It helps you to focus your efforts on knocking out the loan one at a time starting from the smallest to the largest.
  • When you pay off each loan, you will have more funds to channel towards the repayment of other loans. This is what creates the snowball effect.


  • You may end up paying more in the form of interest when you pay off your debt one at a time.

2. Debt avalanche

If you want to see the amount you owe decrease as fast as possible, the debt avalanche method may just be the perfect strategy for you. This method is quite different from the snowball method. Unlike the snowball method which pays off debts one at a time starting from the lowest, the debt avalanche makes a minimum payment on all debts. Whatever is left after that is then used in repayment of the debt with the highest annual percentage rate (APR). This method is also known as debt stacking. The plan is simply to start paying from the one with the highest interest and go to the second-highest once the first is cleared.


  • You will save more money in the long run. This method will help you pay less interest overall.
  • Since debt repayment is from the largest to the smallest, the overall money the individual owes will decrease faster.


  • It requires a lot of commitment and discipline. Since the repayment is started from the largest debt, it can feel discouraging when you don’t seem to be making much progress.

Key Takeaways

  • The debt snowball method puts emphasis on paying off smaller debts first meaning you’ll have some quick wins that will motivate you to continue repaying your debt;
  • The debt avalanche method works by using any excess funds you have to pay off debt with the highest interest rates first, this will ultimately make your debt cheaper but you’ll see results slower;
  • Each repayment method has it’s pros and cons and the one that is right for you will depend on your personality and situation.

About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - the UK small business finance blog for the self-employed community. Here she shares simple, straight-forward guides to make self-employment topics like taxes, bookkeeping and banking easy to understand.