Debt Payoff Strategies: Avalanche vs Snowball Method
When you have multiple debts, choosing the right payoff order can save you thousands in interest and keep you motivated. The two most popular strategies are avalanche and snowball.
The avalanche method prioritises debts by interest rate (highest first). You make minimum payments on everything, then throw any extra money at the most expensive debt. This is mathematically optimal — it minimises total interest paid. However, if your highest-rate debt is also your largest, progress can feel slow.
The snowball method prioritises debts by balance (smallest first). You clear the smallest debt quickly, then roll that payment into the next one. This creates psychological momentum — quick wins keep you going. The trade-off is paying slightly more interest overall.
A hybrid approach works well too: use avalanche for debts above 20% APR (expensive debt is urgent), then switch to snowball for the rest to maintain motivation.
Frequently Asked Questions
Which method saves the most money?
Avalanche always saves the most in total interest. The difference can be significant — hundreds or even thousands of pounds depending on the amounts and rates involved.
Should I save or pay off debt first?
If your debt interest rate exceeds what you would earn in savings, prioritise the debt. The exception is a small emergency fund (£1,000) to avoid going further into debt when surprises happen.
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