When people receive extra funds like a bonus, pay raise, or tax refund, they’ll most likely want to pay off their debts as quickly as possible. But which debts should get targeted first? With the use of a loan payment calculator and the right repayment method, the decision is simple.

There are two popular methods for debt repayment: the snowball method and the avalanche method. This article will compare pros and cons of each of these two methods to help borrowers make an informed financial decision.

Which debts should be paid off first?

Once people determine how much extra money they have, they need to decide which debts to pay off.

Here are a few factors to help make that decision:

  • The debt with the highest interest rate: Paying off debt with a high-interest rate will save money in the long run.
  • The debt with the lowest balance: Paying off a debt with a low balance may be more satisfying than paying off a debt with a high balance.
  • The debt costing the most money each month: If a debt costs a lot of money each month in interest and fees, it may be a good idea for borrowers to pay it off as soon as possible.
  • The debt causing the most stress: If a debt is causing a lot of stress, it would be best to pay it off as soon as possible to help relieve that stress.

Once someone decides which debts to target, they need to devise a solid plan to pay them off. They may want to consider either the debt snowball or the debt avalanche method.

Debt Snowball Method

The snowball method involves a person repaying their debts from the smallest to the most significant, regardless of the interest rate. The logic behind this method is that it will give them a quick win and much-needed motivation to keep going. With each debt they pay off, they’ll have one less bill to worry about and more money to put towards their remaining debts.


  • They’ll see quick results and feel accomplished as they knock out their smaller debts.
  • This method is simple to follow and doesn’t require crunching any numbers.


  • They may pay more in interest because they’re not targeting the highest-interest debt first.
  • It may take longer to pay off debts if there is a large balance on a high-interest credit card.

Avalanche Method

On the other hand, the avalanche method involves repaying debts from largest to smallest, regardless of balance. The logic behind this method is that people will save more money in interest over time by targeting their high-interest debt first. With each debt that’s paid off, there’s less interest accruing and more money available to put towards remaining debts.


  • In the long run, people save money on interest by targeting their high-interest debt first.
  • This method may help people pay off their debts faster because they’re putting more money toward their monthly principal balance.


  • People may not see results as quickly as with the snowball method, which can be discouraging.
  • This method requires borrowers to crunch some numbers and may be more confusing than the snowball method.

Which is Better, Debt Snowball or Avalanche?

So, which is better? The answer really depends on a person’s individual circumstances.

The snowball method may be the way to go if they need a quick win to keep them motivated. However, if they’re looking to save money on interest, the avalanche method may be a better choice in the long run.

Of course, there is no one-size-fits-all answer regarding debt repayment. The best method may depend on the borrower’s unique financial situation. If they’re unsure which method to use, it’s recommended to talk to a financial advisor who can help.

The Bottom Line

No matter which method is chosen, the important thing is to get started. The sooner a person starts repaying their debt, the sooner they’ll be free from its burden.

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