Debt avalanche vs snowball: which pays off faster, with an example
Short answer
Both methods pay every minimum and put all extra money on one target debt; when it is paid off, its payment rolls onto the next. Avalanche targets the highest interest rate first and always costs the least interest. Snowball targets the smallest balance first, which clears whole debts sooner and keeps many people motivated. The best one is the one you will stick with.
Copy-paste code
Spreadsheet logic for the target column
Avalanche target: =INDEX(A2:A10, MATCH(MAX(FILTER(C2:C10, B2:B10>0)), C2:C10, 0)) (highest APR still owed)
Snowball target: =INDEX(A2:A10, MATCH(MIN(FILTER(B2:B10, B2:B10>0)), B2:B10, 0)) (smallest balance still owed)
Extra payment goes to the target; every other debt gets its minimum.| Debt | Balance | APR | Avalanche order | Snowball order |
|---|---|---|---|---|
| Store card | $900 | 26.9% | 1 | 1 |
| Credit card | $4,200 | 22.9% | 2 | 3 |
| Car loan | $3,100 | 7.5% | 3 | 2 |
Source: example debts; the order follows each method's rule
Good to know
When the order is the same under both methods (as for the first debt above), the choice doesn't matter for that debt.
FILTER works in Google Sheets and Excel 365. General information, not financial advice.
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How much does avalanche save?
It depends on the rate gap between your debts; with similar rates the difference is small.
Can I mix them?
Yes: clear one tiny balance first for a quick win, then switch to avalanche.
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