Avalanche saves more: $858 less interest than snowball. It clears your debt in 32 months versus 33 months. Both use the same $700 monthly budget.
The math
Inputs
| Loan at 7% | $2,000 at 7% APR, $40 minimum |
|---|---|
| Card at 29% | $6,000 at 29% APR, $180 minimum |
| Card at 19% | $9,000 at 19% APR, $230 minimum |
| Total monthly budget | $700 |
The formula in words
Every month: add interest to each debt (balance × APR ÷ 12), pay every minimum, then send the rest of the $700 budget to one target debt. Snowball targets the smallest balance; avalanche targets the highest APR. When a debt is gone, its minimum rolls into the extra payment. Repeat until every balance is $0 and add up the interest.
Step by step
| Method | Debt-free in | Total interest | Total paid |
|---|---|---|---|
| Snowball (smallest balance first) | 33 months | $5,573 | $22,573 |
| Avalanche (highest APR first) | 32 months | $4,715 | $21,715 |
| Debt | Balance | APR | Snowball | Avalanche |
|---|---|---|---|---|
| Loan at 7% | $2,000 | 7% | Month 8 | Month 32 |
| Card at 29% | $6,000 | 29% | Month 22 | Month 18 |
| Card at 19% | $9,000 | 19% | Month 33 | Month 30 |
Result
- Snowball: debt-free in: 33 months (2 years and 9 months)
- Snowball: total interest: $5,573
- Snowball: payoff order: Loan at 7% (month 8), Card at 29% (month 22), Card at 19% (month 33)
- Avalanche: debt-free in: 32 months (2 years and 8 months)
- Avalanche: total interest: $4,715
- Avalanche: payoff order: Card at 29% (month 18), Card at 19% (month 30), Loan at 7% (month 32)
- Interest the avalanche saves: $858
- Difference in time: 1 month
Assumptions
- The same $700 every month, fixed minimum payments as listed, and no new charges.
- These are estimates that show how the math works, not financial, tax or legal advice. Lenders, card issuers and the IRS can calculate slightly differently.
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What the $858 difference means for you
The avalanche method saves you $858 in interest compared with the snowball method. That is real money that stays in your pocket instead of going to your lenders. The trade-off is small: you become debt-free in 32 months with avalanche versus 33 months with snowball. One extra month of payments is a minor inconvenience for nearly a thousand dollars in savings.
If you are stressed about debt, that $858 could cover an emergency or help you start rebuilding savings once the balances are gone. The avalanche method also attacks your most expensive debt first, which is the card at 29%. That high rate is what makes avalanche so effective here. Every extra dollar you send to that card stops interest from piling up at 29% APR.
The snowball method gives you a quick win by clearing the $2,000 loan at 7% in month 8. That emotional boost can keep you motivated, but it costs you $858. Only you can decide if that motivation is worth the price. If you have struggled to stick with a payoff plan before, the snowball’s early victory might be worth it. If you are disciplined and want the lowest total cost, avalanche wins clearly.
Why avalanche wins with these numbers
The avalanche method targets the highest APR first. In your case, that is the $6,000 card at 29%. By sending every extra dollar there, you eliminate that balance by month 18. Once it is gone, its $180 minimum rolls into the extra payment, so you can attack the next highest rate: the $9,000 card at 19%. That card is cleared by month 30. Finally, the $2,000 loan at 7% is paid off by month 32.
The snowball method targets the smallest balance first. That is the $2,000 loan at 7%. You clear it by month 8, which feels great. But during those 8 months, the 29% card keeps charging interest on a $6,000 balance. That interest adds up fast. Even though you eventually pay off the 29% card by month 22, you have already paid more interest than you would have with avalanche.
The difference comes down to the rates. The 29% card is the most expensive debt by far. Every month you delay paying it down, you pay more interest. Avalanche minimizes the time that balance sits at 29%. Snowball lets it sit longer, which is why it costs $858 more. The 19% card is also expensive, but less so than the 29% one. The 7% loan is the cheapest, so it should be paid last if you want to save the most money.
How to change the outcome
You can change the outcome by changing how you allocate your $700 monthly budget. The results above assume you pay the minimums on all debts and send the rest to one target debt. If you increase your total monthly payment, you will pay less interest and become debt-free sooner. But any extra amount must come from your budget, not from new charges. The assumptions say no new charges, so adding debt would change everything.
You could also switch methods. If you start with snowball and then switch to avalanche, you might get the quick win of clearing the $2,000 loan while still saving some interest. But the math above shows the full snowball path costs $858 more. A hybrid approach is not calculated here, so the exact savings would differ.
Another way to change the outcome is to reduce the rates. The calculation uses fixed APRs of 7%, 29% and 19%. If you can lower any of those rates, less interest accrues each month, and more of your $700 goes to principal. But the results above do not include any rate changes. You would need to confirm with your lender or card issuer whether a lower rate is possible. Also, the minimum payments are fixed at $40, $180 and $230. If those minimums change, the payoff order and total interest could shift.
Practical next steps
First, confirm your actual minimum payments and APRs with your lender and card issuers. The numbers here are estimates. Lenders and card issuers can calculate slightly differently, so your real payoff time and interest may vary. Once you have the exact figures, you can decide which method to use.
If you choose avalanche, list your debts from highest APR to lowest: the 29% card, then the 19% card, then the 7% loan. Pay the minimums on all three, then send every extra dollar to the 29% card until it is gone. That should happen around month 18 based on these numbers. Then roll its $180 minimum into the extra payment for the 19% card. Clear that by month 30. Finally, pay off the 7% loan by month 32.
If you choose snowball, list your debts from smallest balance to largest: the $2,000 loan, then the $6,000 card, then the $9,000 card. Pay minimums on all, then attack the loan. It should be gone by month 8. Then roll its $40 minimum into the extra payment for the $6,000 card. Clear that by month 22. Then finish the $9,000 card by month 33.
Track your progress every month. Use a simple spreadsheet or a notebook. Seeing the balances drop can keep you motivated. Also, avoid new charges on these cards while you are paying them off. The assumptions say no new charges, so adding debt would slow you down and increase interest. If you receive a windfall, you could put it toward the highest-rate debt to save even more, but that scenario is not calculated here. Finally, remember these are estimates, not financial advice. Confirm details with your lender, card issuer or the IRS where it matters.
Frequently asked questions
Is the avalanche method always better than snowball?
Not always. Avalanche saves the most interest when higher-rate debts have larger balances, as in this case. If your smallest debt also has the highest rate, snowball might save more. The math depends on your specific balances and rates. Here, avalanche saves $858 because the 29% card is both large and expensive.
How much does the 29% card cost me if I use snowball?
With snowball, you pay off the 29% card by month 22. During those months, interest accrues at 29% on the $6,000 balance. That is the main reason snowball costs $858 more overall. The exact interest on that card alone is not broken out, but it drives the difference.
What if I can pay more than $700 a month?
Paying more would reduce both your total interest and your payoff time. The results here assume exactly $700 every month. If you can add more, you would save beyond the $858 difference. But any extra must come from your budget, not new charges, to keep the math valid.
Does the snowball method have any advantage here?
Yes. Snowball clears the $2,000 loan by month 8, giving you a quick win. That can boost motivation if you need it. But it costs $858 more in interest and takes one extra month overall. The advantage is psychological, not financial.
Are these numbers guaranteed?
No. They are estimates based on fixed APRs, fixed minimum payments, and no new charges. Lenders and card issuers can calculate slightly differently. Your actual payoff time and interest may vary. Confirm your exact terms with your lender or card issuer before making decisions.