What is the Debt Snowball?
The debt snowball pays minimums on everything, then throws all spare money at the smallest balance regardless of interest rate. When it clears, its payment rolls into the next smallest — the "snowball" grows.
Mathematically the avalanche (highest rate first) always costs less. The snowball wins on behaviour: early wins build momentum, and studies consistently find people stick with it longer.
Formula & worked example
Pay minimums on all, direct everything else to the smallest
When one clears, roll its payment into the next
Worked example: three debts of $28,000 at 23%, $6,000 at 6.5% and $44,000 at 12%, with $2,000 a month available. The snowball clears the small $6,000 loan first — even though it is the cheapest debt — then the $28,000, then the $44,000. You are debt-free in 4.4 years having paid $26,602 in interest.
How to use this debt snowball calculator
- Enter each balance and interest rate. Leave unused slots at zero.
- Enter the total monthly amount you can put toward all debts combined.
- The table shows the order debts are cleared and when.
- Compare against the avalanche method to see the interest difference.
Smart tips
- The snowball costs slightly more interest but has a far better completion rate — the best plan is the one you finish.
- Do not close cleared credit cards immediately; available credit affects your utilisation ratio and score.
- Stop adding new debt first. Paying down while still borrowing rarely works.
- Any windfall — bonus, tax refund, gift — should go straight to the current target debt.
- If two debts are similar in size, target the higher rate first for a free improvement.
Frequently asked questions
What is the debt snowball method?
Paying minimums on all debts while directing every spare dollar to the smallest balance, then rolling that payment into the next smallest.
Is snowball or avalanche better?
Avalanche saves more interest mathematically. Snowball has better psychological momentum and higher completion rates. Both beat doing nothing.
Should I pay off debt or save first?
Build a small emergency buffer first — around one month of expenses — so an unexpected bill does not push you back into debt.
Does the snowball method work with a mortgage?
It is designed for consumer debt. Low-rate mortgages are usually left until other debts are cleared.
Want the theory behind the numbers? Read our debt guides on the Money Blog.