When you commit to paying off debt, you will immediately run into the classic debate: Debt Avalanche vs. Debt Snowball. Using a debt avalanche calculator alongside a snowball calculator is the best way to understand the difference and choose the right path for your specific situation.
The Debt Avalanche Method
The avalanche method focuses entirely on mathematics. You target the debt with the highest interest rate first, regardless of the balance size. A debt avalanche calculator will always show that this method saves you the most money in total interest and gets you debt-free the fastest. It is the objectively optimal financial choice.
The Debt Snowball Method
The snowball method focuses on behavioral psychology. You target the debt with the smallest balance first, regardless of the interest rate. By securing quick wins and eliminating individual debts early, you build massive motivation. Many people who fail with the avalanche method succeed with the snowball method because the early psychological victories keep them engaged.
Which Should You Choose?
Plug your numbers into both calculators. Look at the difference in total interest and payoff dates. If the avalanche method saves you thousands of dollars and months of time, it might be worth the grind. If the difference is only a few hundred dollars, the psychological momentum of the snowball method is likely the better choice.