Target your highest interest rate debt first and save the maximum amount in interest. The mathematically optimal payoff strategy — see your savings instantly.
List all your debts and sort by interest rate, highest first. Pay minimums on everything, then put all extra money toward the highest-rate debt. When it's paid off, roll that payment into the next highest rate. The "avalanche" of freed-up payments accelerates each subsequent payoff.
Interest compounds against you daily. By targeting the highest rate first, you reduce the fastest-growing debt immediately. Every dollar of interest you avoid is a dollar that stays in your pocket. For people with credit card debt at 20%+ APR, avalanche can save thousands over snowball.
Pay minimums on all debts, then put all extra money toward the highest interest rate debt first. Once it's eliminated, move to the next highest. This is the mathematically optimal strategy.
Avalanche always saves more money in interest. The difference can be hundreds or thousands of dollars depending on your balances and rates. Use the comparison above to see the exact difference for your debts.
It depends on your debt mix, but people with high-interest credit cards often save $1,000–$5,000+ in interest compared to the snowball method. The calculator shows your exact savings.
If your highest-interest debt is also your largest, it might take a long time before you eliminate your first debt. Some people lose motivation. If that's you, start with snowball and switch to avalanche later.