If you’re drowning in multiple debts—credit cards, personal loans, maybe even BNPL apps—you’re probably wondering: “Which one should I pay off first?”
Two of the most popular strategies are the Debt Snowball and the Debt Avalanche. Both are effective, but they work in very different ways. Let’s break them down so you can decide which one fits your financial situation.
1. What is the Debt Snowball Method?
The Debt Snowball focuses on psychology more than math.
- Step 1: List your debts from smallest balance to largest balance.
- Step 2: Pay the minimum on all debts, but throw every extra rupee at the smallest debt.
- Step 3: Once that’s cleared, roll the freed-up money into the next-smallest debt.
- Step 4: Repeat until all debts are gone.
👉 Example:
- Credit Card A: ₹5,000
- Loan B: ₹20,000
- Loan C: ₹80,000
Pay off Credit Card A first. When it’s gone, the money that was going to A now goes toward B, and so on.
✅ Biggest Advantage: Quick wins and motivation.
❌ Downside: May cost more in interest if bigger debts have high rates.
2. What is the Debt Avalanche Method?
The Debt Avalanche focuses on math and efficiency.
- Step 1: List debts from highest interest rate to lowest interest rate.
- Step 2: Pay minimums on all debts, but throw every extra rupee at the highest-interest debt.
- Step 3: Once that’s cleared, move to the next highest-interest debt.
👉 Example:
- Credit Card (36% APR): ₹50,000
- Personal Loan (14% APR): ₹80,000
- Car Loan (9% APR): ₹2,00,000
You’d attack the credit card debt first, even though it’s not the smallest.
✅ Biggest Advantage: Saves the most money in the long run.
❌ Downside: Progress may feel slow at first, which can hurt motivation.
3. Side-by-Side Comparison
| Feature | Debt Snowball 💡 | Debt Avalanche 📉 |
|---|---|---|
| Focus | Smallest balance first | Highest interest rate first |
| Motivation | Strong (quick wins) | Lower (slow at start) |
| Cost Savings | Less efficient | Most efficient |
| Best For | People needing motivation | People comfortable with patience & math |
| Psychological Boost | Very high | Low to medium |
4. Which Method is Right for You?
Ask yourself:
- Do you struggle with staying motivated? → Snowball works best.
- Are you disciplined and want to save the most money? → Avalanche is better.
- Do you have both small debts and high-interest loans? → Sometimes a hybrid approach works.
5. Hybrid Method (Best of Both Worlds)
Some people start with Snowball for motivation, then switch to Avalanche for savings.
👉 Example: Pay off your two smallest debts first for confidence, then move on to the highest-interest debt.
This balances emotional wins with financial efficiency.
6. Real-Life Example
- Arjun has 3 debts:
- ₹15,000 credit card at 30%
- ₹60,000 personal loan at 13%
- ₹1,50,000 education loan at 9%
👉 If he uses Snowball → He clears the ₹15,000 card first, feels motivated, but pays more in interest overall.
👉 If he uses Avalanche → He attacks the 30% card debt first too (which is also smallest in this case), saving both money and gaining motivation.
This shows sometimes both methods align perfectly!
7. Mistakes to Avoid When Using These Methods
- ❌ Not sticking to the plan once excitement fades.
- ❌ Continuing to use credit cards while paying them off.
- ❌ Ignoring emergency savings (you might end up back in debt).
- ❌ Only paying minimums and expecting fast results.
8. Action Plan to Get Started
- List all your debts: balance, interest rate, and minimum payment.
- Decide whether you need more motivation (Snowball) or more savings (Avalanche).
- Automate payments to avoid missing EMIs.
- Track your progress monthly—it’s very motivating to see balances shrink.
- Reward yourself (cheap/free rewards) when a debt is fully paid off.
9. My Opinion
Both methods work, but personally, I believe:
- If you’re new to debt payoff and easily discouraged → Start with Snowball.
- If you’re financially disciplined and don’t mind slow results → Use Avalanche.
- The ultimate goal isn’t which method you choose, it’s about being debt-free.
10. Final Thoughts
Debt repayment is as much about psychology as it is about math. Some people need quick wins to stay motivated, while others want to optimize savings.
👉 Snowball gives motivation. Avalanche gives savings.
👉 The best method is the one you can actually stick with until you’re debt-free.