The Two Main Debt Repayment Strategies
If you have multiple debts, the order you pay them off matters more than most people realise. Do it wrong and you pay more interest than you need to. There are two established approaches, and they work very differently.
The Avalanche Method
With the avalanche method, you throw every spare pound at the debt with the highest interest rate first, while paying the minimum on everything else. Once that debt is gone, you roll that freed-up payment onto the next-highest rate.
Pros: - Mathematically optimal - saves the most money - Reduces total interest paid - Gets you out of debt faster
Cons: - Can feel slow if high-interest debt has a large balance - Requires discipline when you don't see quick wins
This is the correct strategy on paper. If you carry a balance on a high-rate credit card alongside a cheaper personal loan, every extra pound you put on the loan while the card keeps running is costing you money. The maths does not care how the balances feel.
The Snowball Method
The snowball method ignores interest rates entirely. You pay off the smallest balance first, then roll that payment onto the next smallest, and so on.
Pros: - Quick wins keep you motivated - Simplifies your finances faster (fewer accounts) - Psychological boost from closing accounts
Cons: - May cost more in total interest - Takes longer to become debt-free
The snowball method is genuinely useful for one type of person: someone who has tried and failed to stick to a debt plan before. The motivational hit from closing an account is real, and a plan you actually stick to beats an optimal plan you abandon. If discipline is not the issue, though, paying a higher rate for longer is just a bad trade.
Our Recommendation
For most UK consumers, a hybrid approach works best. Start with the snowball method to build momentum, then switch to avalanche once you have cleared 2-3 small debts. The early wins settle the anxiety, and once you are in a rhythm, shifting to rate-order maximises what you save. Use our Debt Payoff Calculator to see exactly how much each strategy would cost you.