Compare snowball and avalanche before you pick a payoff order

Paying “a bit extra on everything” feels responsible and usually hides which debt is actually moving. Two simple orders exist. Snowball puts the extra money on the smallest balance so a debt disappears sooner. Avalanche puts the extra money on the highest interest rate so you pay less interest if the math is the only goal. You can compare them on paper before you promise either one to yourself.

This is an educational estimate. It is not financial advice, not a credit-counseling plan, and not a promise about what your lender will charge. Interest here uses a simple monthly rate: APR divided by 12, applied to the remaining balance. That ignores daily accrual, late fees, promo rates that expire, and any penalty APR. A real statement can be higher or lower. If you are choosing among hardship programs, bankruptcy, or a consolidation loan, talk to a qualified adviser. A spreadsheet cannot see those options.

What you type once

One row per debt. Use the statement, not your memory of “about four thousand.”

Then one number for the extra you can send every month beyond all the minimums. If you do not have an extra amount you can repeat, do not invent one. Run the sheet at zero extra first. That is the “minimums only” picture, and it is allowed to be discouraging. It is still a fact.

Do not include a debt you have already paid off. Do not include a bill that is not a debt, such as rent, unless you are deliberately modeling an arrears balance you have agreed to repay. Mixing rent into the snowball makes the “debt-free date” mean something else.

How the two orders differ

Each month, every debt gets at least its minimum, unless you have already paid it off. The extra goes to one target.

• Snowball: target the smallest balance. When that balance hits zero, its minimum joins the extra and moves to the next smallest balance that is still open.
• Avalanche: target the highest APR. When that one hits zero, roll its minimum onto the next highest APR.

The total you pay each month stays the same in both pictures if you hold the extra constant. What changes is the order, the date the last balance hits zero, and the interest the estimate adds along the way.

Interest for a month, in this model, is balance times APR/12, taken before or after the payment depending on how you set the row. Pick one convention and use it for both strategies so the comparison is fair. Do not use daily compounding in one column and monthly in the other.

A worked comparison with made-up balances

Three debts. Extra payment: 100 a month. These numbers are an illustration, not a recommendation.

Snowball attacks Card A first because 500 is the smallest balance, even though its rate is not the highest. Avalanche attacks Card B first because 24 percent is the highest rate, even though the balance is the largest.

You want the sheet to show, side by side:

• Months until the last balance is zero
• The payoff date that falls out of those months
• Total interest under this estimate
• Total paid (everything you sent, minimums plus extra)
• Interest saved versus the other method, or versus minimums only
• The payoff order in words
• A balance chart over time
• A progress log you can update when a real statement arrives
• A long schedule of month-by-month balances if you want to see the ugly middle

Read months and total interest together. Snowball can finish a small card quickly and still cost more interest. Avalanche can look slow in month two because the big high-rate balance is still there. If you already know you will quit unless an account closes soon, that is a behavior fact. Write it down. The sheet will not scold you for choosing the path you will actually follow. It should stop you from claiming the cheaper path when you did not pick it.

When the real world leaves the model

Update the balances when a statement does not match the schedule. A returned payment, a fee, or a rate change means the old payoff date is stale. Replace the balance and APR and let the months recalculate. Do not “catch up” by typing a fake extra payment you did not send.

A promotional APR that jumps later is outside this estimate. If the promo ends in four months, either model the later rate from the start as a conservative case, or stop trusting the date once the promo ends and rerun. The calculator described here does not switch rates mid-stream for you.

Minimums that are a percent of the balance, not a flat number, will shrink as you pay down. A flat minimum in the sheet is a simplification. If your real minimum drops, you can keep paying the old minimum as if it were extra. That usually helps. The model will not know you did that unless you change the extra.

A monthly check that takes ten minutes

1. Pay at least the minimums you typed. The order only works if those still get paid.
2. Send the extra to the one target the strategy names. Split extras undo the comparison.
3. When a balance hits zero, add its old minimum to the extra. That roll-up is the whole engine.
4. Log the payment in the progress section so next month’s starting balance is the statement, not last quarter’s hope.
5. If you cannot make the extra for a month, rerun with the extra you can actually send. A wrong extra produces a wrong date. Believing the old date is how people feel blindsided.

The debt workbook that does this comparison takes the balances, rates, and minimums once and shows snowball and avalanche together: months to zero, payoff date, total interest, total paid, interest saved, payoff order, a balance chart, a progress log, and long schedules. Formulas only. Excel and Google Sheets. Interest is a simple APR/12 estimate on the remaining balance. It ignores daily accrual, fees, and promo APRs. Educational estimate only. Not financial advice. The link is in the box below.