Avalanche says: attack the highest interest rate first. Snowball says: clear the smallest balance first. Both can work. The useful question is what changes when you run them on the same debts with the same budget.
Jordan’s three debts (shared assumptions)
Total debt: $25,200. After all three minimums, Jordan has $400/month left to put toward principal.
- Credit card: $8,400 at 21.9% APR — minimum $210/month
- Personal loan: $4,200 at 11.9% APR — minimum $145/month
- Car loan: $12,600 at 6.9% APR — minimum $310/month
Combined minimums: $665/month. Plus $400 extra = $1,065/month total debt cash leaving the budget. When a debt is paid off, its minimum rolls into the next target (no lifestyle creep).
Order matters here because the smallest balance (personal loan) is not the highest rate (credit card). That is what makes avalanche and snowball diverge.
Method A — avalanche (highest rate first)
Extra $400 always hits the credit card first, then the personal loan, then the car.
- Months 1–17: Pay card minimum + $400 extra ($610 to the card) while keeping the loan and car at minimums. Card clears around month 17.
- Months 18–20: Roll the freed $210 into the personal loan with the $400 extra. Personal loan clears around month 20.
- Months 21–27: Everything remaining goes to the car. Car clears around month 27.
Estimated totals (avalanche): about 27 months to debt-free; about $3,290 total interest (roughly $1,360 card + $590 personal loan + $1,340 car).
Method B — snowball (smallest balance first)
Same minimums and same $400 extra. Only the priority order changes: personal loan → credit card → car.
- Months 1–9: Extra $400 goes to the $4,200 personal loan. First win: loan clears around month 9.
- Months 10–20: Roll the freed $145 into the credit card with the $400 extra. Card clears around month 20.
- Months 21–28: Everything remaining goes to the car. Car clears around month 28.
Estimated totals (snowball): about 28 months to debt-free; about $3,700 total interest (roughly $2,155 card + $190 personal loan + $1,355 car).
Side-by-side on the same debts
- Time: avalanche ~27 months vs snowball ~28 months (about one month faster for avalanche in this setup).
- Interest: avalanche ~$3,290 vs snowball ~$3,700 — snowball costs roughly $410 more in interest here.
- First closed account: avalanche closes the expensive card near month 17; snowball closes the small loan near month 9.
Neither path is “wrong.” Avalanche wins on dollars. Snowball wins on an earlier closed account—useful if that early win is what keeps payments consistent.
Trade-offs
If Jordan sticks with avalanche for the full 27 months, the spreadsheet wins. If Jordan tends to abandon a plan with no visible win for a year and a half, snowball’s earlier payoff can be cheaper in practice—because unfinished avalanche is worse than finished snowball.
A common mistake is switching methods every few months and never letting rolled minimums compound. Pick an order, automate the extra payment, and review quarterly—not weekly.
A hybrid
Clear one small, annoying balance first for momentum, then switch the remaining stack to highest-rate order. In Jordan’s numbers, that is close to pure snowball already: the personal loan is both the smallest balance and a natural first win, then the card becomes the rate-focused target.
What usually changes the timeline more than the method
- Payment size. An extra $550/month on either method beats $400/month on the “optimal” order.
- Rolling minimums. When a debt dies, that minimum must stay in the debt budget.
- New charges. Paying down a card while still using it as a backup emergency fund resets the clock.
Before either method
Keep a small cash buffer (often $500–$1,000, or one month of essentials if feasible) so a car repair does not go straight back onto the card. Then run the payoff plan. Size a fuller reserve later with the Emergency Fund Calculator.
Which method fits
- Prefer avalanche if one rate is much higher than the others (as with Jordan’s 21.9% card) and you can stay consistent without an early win.
- Prefer snowball if past plans died from lack of progress signals, and the interest gap for your balances is modest (here, roughly $410).
- Re-run the numbers if balances or rates change—especially after a balance transfer or refinance.
Model your own balances in the Debt Payoff Calculator. The Debt Payoff Guide covers traps once payments are underway. Finishing matters more than winning an argument about method names.
Disclaimer: This article is educational and not financial advice. Lender minimums, fees, and compounding methods differ. Use the example as a planning template, then check your own statements and risk tolerance.