Debt Snowball vs Avalanche: Which Should You Pick?
Snowball clears the smallest balance first, avalanche the highest rate. Both methods run on the same three debts, with the interest, the timing and the trade-off shown.
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Finance guides
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Frequently asked questions
Is the debt snowball or avalanche method better?
Avalanche is usually better on cost, because it sends spare money to the highest interest rate first and so adds the least interest. Snowball clears whole accounts sooner, which some people find easier to stick with. If the smallest debt is also the most expensive one, the two plans are identical.
Does the debt snowball cost more than the avalanche?
Often, yes. On the three debts in this article, snowball adds £458.25 more interest than avalanche and finishes one month later. The gap depends on how far apart your rates are and how much of your balance sits on the most expensive debt. When the rates are close, the difference can be small.
Do I still pay the minimum on every debt?
Yes. Both methods pay the required minimum on every account every month, then put all the spare money on one target debt. Missing a minimum can bring fees, a worse credit record and extra interest, so the budget must cover every minimum before any extra goes to the target.
What happens when I clear the first debt?
The payment that was going to it, its minimum plus the extra, rolls straight onto the next debt in the order. That roll-over is what gives both methods their speed. The calculator on this page applies it in the same month the debt clears, so no money sits idle.
How many months of expenses should an emergency fund cover?
It depends on your situation, and there is no universal figure. A common rule of thumb is three to six months of essential spending. The emergency fund calculator’s starting guide runs from 3 to 6 months for a household with more than one predictable income, backup and no dependants, up to 6 to 12 months for self-employed people with dependants or no backup.
Should an emergency fund be based on income or expenses?
Use essential expenses, not income. The fund has to pay the bills that carry on when your income stops: housing, utilities, basic food, insurance, essential transport and minimum debt payments. Holiday and entertainment spending can usually be paused, so leave it out. On £2,000 a month of essentials, six months of cover is £12,000, however much you earn.