● Money & small business
Debt snowball vs avalanche with real numbers: 5 debts, $25,450, month by month
The debt snowball (smallest balance first) and the debt avalanche (highest interest rate first) are usually compared in the abstract. Here they are on one realistic set of debts, month by month, so you can see what the difference actually is.
The debts
| Debt | Balance | APR | Minimum |
|---|---|---|---|
| Credit card A | $6,400 | 24.9% | $160 |
| Credit card B | $2,100 | 19.9% | $60 |
| Car loan | $11,800 | 6.9% | $310 |
| Personal loan | $4,300 | 12.9% | $140 |
| Store card | $850 | 27.9% | $35 |
| Total | $25,450 | $705 |
On top of the minimums there's $200 a month extra, so the budget is $905 a month. Both methods pay the same $905 every month; only the order changes. When a debt is paid off, its minimum rolls into the next one.
The result
| Snowball | Avalanche | |
|---|---|---|
| Months to debt-free | 35 | 34 |
| Total interest | $5,509.53 | $5,038.80 |
The avalanche saves $470.73 and one month. That's real money, but it's under 2% of the debt.
When each debt is gone
| Month paid off | Snowball order | Avalanche order |
|---|---|---|
| 1st | Store card: month 4 | Store card: month 4 |
| 2nd | Credit card B: month 12 | Credit card A: month 24 |
| 3rd | Personal loan: month 19 | Credit card B: month 27 |
| 4th | Credit card A: month 30 | Personal loan: month 29 |
| 5th | Car loan: month 35 | Car loan: month 34 |
Both start with the store card, because it's both the smallest balance and the highest rate. After that they split. By month 19 the snowball has cleared three debts; the avalanche has cleared one and is still working on the $6,400 card. For many people, that visible progress is what keeps them going, and a plan you stick to beats a cheaper plan you abandon in month 10.
When the choice matters more
- Big gaps in interest rates. When the biggest balance also has the highest rate, the avalanche's savings grow.
- A small extra payment. With little extra, each debt takes longer and interest compounds for longer, so the order matters more.
- Similar rates. If your debts are all around 20%, the two methods land within a few dollars, so pick the one that motivates you.
How these numbers were produced
Interest accrues monthly at APR ÷ 12, rounded to the cent. Each debt gets its minimum; the rest of the $905 goes to the top-priority debt. The results come from a spreadsheet and were checked against an independent month-by-month simulation, with the same payoff month, interest and balance every month. Lenders that compute interest daily will differ slightly. Not financial advice.