With the same $370 monthly budget in our example, snowball clears the first account 18 months earlier, while avalanche gets completely debt-free 6 months sooner and saves about $728 in interest.
That does not mean one method is universally correct. Both keep paying every minimum. Only the target for the extra $150 changes—and that order decides first-win timing, total interest, and when the last balance hits zero.
The same $370 budget, two different orders
Here is the illustrative two-debt setup. Both strategies receive this full $370 every month.
| Debt | Balance | APR | Minimum |
|---|---|---|---|
| Personal loan | $2,000 | 10% | $60 |
| Credit card | $6,500 | 22.99% | $160 |
Assumptions (disclosed): no new charges; fixed APRs; typed minimums stay constant each month; extra $150 is available every month; monthly interest matches the MyClearCost debt-payoff calculator (balance × APR ÷ 12, then payments). This is a planning illustration, not a lender statement.
What happens with the debt snowball?
Minimums continue on both debts. Extra dollars target the smallest balance first—so the $2,000 personal loan gets the extra payment. When that loan is gone, its payment rolls onto the credit card.
- First debt gone: Month 10 (personal loan)
- Debt-free: Month 36
- Total interest: $2,943.50
- Total paid: $11,443.50
What happens with the debt avalanche?
Minimums continue on both debts. Extra dollars target the highest APR first—so the 22.99% credit card receives the extra payment. When the card is gone, that capacity rolls onto the personal loan.
- First debt gone: Month 28 (credit card)
- Debt-free: Month 30
- Total interest: $2,215.20
- Total paid: $10,715.20
Snowball vs avalanche side by side
| Result | Snowball | Avalanche |
|---|---|---|
| First target | Personal loan | Credit card |
| First debt gone | Month 10 | Month 28 |
| Debt-free | Month 36 | Month 30 |
| Total interest | $2,943.50 | $2,215.20 |
Snowball
- First debt gone
- Month 10
- Debt-free
- Month 36
- Total interest
- $2,943.50
Avalanche
- First debt gone
- Month 28
- Debt-free
- Month 30
- Total interest
- $2,215.20
Why does avalanche cost less here?
The credit card carries the highest APR at 22.99%. Avalanche attacks that expensive balance first, so less high-rate interest has time to accumulate. Snowball instead clears the smaller $2,000 loan first. That produces an earlier account payoff, but it leaves the higher-rate card larger for longer.
Which method should you use?
If your priority is paying the least interest and finishing sooner under a fixed budget, avalanche wins in this example. If your priority is seeing one account disappear sooner, snowball delivers that first visible payoff much earlier here.
Some people value closing a smaller account sooner. Others prefer minimizing interest even if the first payoff takes longer. The numbers above show the cost of that tradeoff for these two debts—not a rule that one method is always better.
If extra is zero: choosing an order does not create payoff capacity. The first practical step is finding sustainable room above required minimums.
Your Next Move
Ready to use your numbers? Run your balances in the debt snowball vs avalanche calculator. Paying only card minimums? See what that costs.
Sources
- Consumer Financial Protection Bureau, How to reduce your debt (highest-interest-rate method and snowball method)
- Consumer Financial Protection Bureau, Reducing debt worksheet (Your Money, Your Goals toolkit)
- Illustrative results match the MyClearCost debt-payoff calculator: monthly interest as balance × APR ÷ 12, then minimums, then remaining budget to the current snowball or avalanche target; payments roll after a debt is paid. Minimums and APRs are planning assumptions. Your statements and agreements control.