Debt avalanche or snowball: compare both with the same budget

The order changes; your budget should not

Avalanche directs extra payments towards the highest interest rate. Snowball directs them towards the smallest balance. To compare the approaches fairly, keep the same total monthly repayment budget and meet the entered minimums on the other debts.

Interest can absorb a small payment

A fictional $5,000 balance at 20% a year accrues about $83.33 over one month under a simple annual-rate-divided-by-12 model. A $100 payment reduces principal by about $16.67 before fees. A $200 payment reduces it by about $116.67. Actual card interest and minimum-payment rules can differ.

Compare more than the first payoff date

Look at the estimated total interest, when each balance clears and whether the payment is sustainable. A small early win may help motivation; targeting a higher rate generally tackles interest cost. Neither result makes essential housing, utilities or an urgent hardship issue less important.

Use actual minimums and review the limits

Enter each balance, annual rate and current minimum payment, plus extra money available across all debts. The tool keeps a shared repayment budget as debts clear. It does not reproduce promotional expiries, every lender’s changing minimums, fees or missed-payment consequences.

If the plan does not repay the debt

Do not treat an unreachable result as a reason to skip essential costs. Check the entries and speak with the lender about available hardship arrangements where needed. A repayment-order comparison is only one part of a workable cash-flow plan.

Official references

General information and fictional examples; independent professional review has not been completed.

Sources checked 22–23 October 2026. Examples and worksheets are our own illustrations.

• MoneySmart: paying off a credit card ↗

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