When you have more than one debt, the order you pay them off matters. The two most popular methods are the debt snowball and the debt avalanche. Both start the same way: pay the minimum on every debt, then put every extra dollar toward one target debt.
The debt snowball
Target the smallest balance first, regardless of interest rate. When it's gone, roll that payment into the next-smallest balance. Quick wins come early, which helps many people stay motivated.
The debt avalanche
Target the highest interest rate first. This usually costs less in total interest over time, because the most expensive debt disappears first.
How to choose
- Choose the snowball if you need early momentum or have struggled to stick with plans before.
- Choose the avalanche if you're motivated by saving the most money and are comfortable waiting longer for the first payoff.
- The best method is the one you'll keep doing every month.
Get organized first
Before choosing, list every debt with its balance, interest rate, and minimum payment on one page. Seeing the full picture makes the decision much easier.
A tool to help
Our Debt Destroyer Planner has a debt inventory worksheet, side-by-side snowball and avalanche worksheets, a payoff calendar, and monthly payment trackers.
This article is for general education and is not financial advice. Your results depend on your balances, rates, and payments.