Debt Payoff Strategies 2026: Snowball vs Avalanche

Snowball Method

Pay smallest balance first.

• ✅ Quick wins, motivation
• ❌ May pay more interest

Avalanche Method

Pay highest interest first.

• ✅ Mathematically optimal
• ❌ Slower early progress

Debt Consolidation

Combine into one lower-rate loan.

• ✅ Simpler payments
• ❌ May extend payoff time

Debts:

• Credit card: $5,000 @ 22%
• Car loan: $10,000 @ 6%
• Student loan: $15,000 @ 5%

Snowball order: Credit card → Car → Student Avalanche order: Credit card → Car → Student (same in this case) Interest saved with avalanche: Typically $500-$2,000 depending on balances