Avalanche vs. snowball: what the math actually says

The avalanche method targets your highest-interest debt first. Mathematically, it's almost always the winner — you're eliminating the most expensive debt while paying minimums on everything else. When that debt is gone, its minimum payment rolls into your extra payment for the next-highest-rate debt. The interest savings compound quickly.

The snowball method targets your smallest balance first. You pay it off faster, get a visible win, and roll that payment forward. Dave Ramsey made this method famous specifically because the psychological momentum is real for some people. But the math is worse, often by thousands of dollars and months of extra payments. If you're someone who sticks to a plan when you see progress, snowball might be the right call anyway. Know the cost of that choice before you make it.

The minimum payment rollover

This is the mechanic that makes aggressive debt payoff work. When a debt hits zero, don't reduce your total monthly payment. Take the minimum you were paying on that account and add it to the extra payment you're already making. The total amount leaving your account stays the same; it just hits fewer debts with more force. Each payoff accelerates the next one.

When snowball wins on math

Occasionally snowball beats avalanche even on total interest paid. This happens when a small-balance debt carries a disproportionately large minimum payment relative to its balance. Paying it off early frees up cash faster than targeting a higher-rate debt with a smaller minimum would. The calculator runs both strategies against your actual numbers and shows you exactly which one wins for your specific situation.

The extra payment question

Even small extra payments matter more than most people realize. An extra $200/month on a $15,000 credit card balance at 22% APR cuts the payoff time nearly in half and saves over $5,000 in interest. The tradeoff against investing depends on your rate: if your debt is at 22% APR and your investment account returns 8%, the math strongly favors paying the debt first. Below about 6-7% APR, the case for investing instead gets stronger.

Results use monthly compounding. The simulation runs up to 600 months. Interest calculations are approximations — actual payoff amounts depend on your lender's exact calculation method and any fees.