Snowball vs. Avalanche Debt Repayment Methods

Debt Snowball vs Avalanche

 

Snowball Method:

Pay off your debt with the smallest balance first. Once it is paid off, add that payment to the debt with the next smallest balance until all debts are paid off!

Advantages of the Snowball Method:

Paying off the small bills first can give you a sense of accomplishment and keep you motivated to pay off the rest.

Disadvantages of the Snowball Method:

You may end up paying more in interest and taking longer to pay off all of your debt.


Avalanche Method:

Pay your debt with the largest interest rate first. Once it is paid off, add that payment to the debt with the next largest interest rate until all debts are paid off!

Advantages of the Avalanche Method:

Paying off the debt with the highest interest rate is the fastest way to pay off your debt and often saves you more money.

Disadvantages of the Avalanche Method:

If your debt with the highest interest rate is a large one, you may feel like you are getting nowhere and give up.