Debt Snowball vs Avalanche: How to Compare Them in a Spreadsheet
The avalanche method (highest interest rate first) costs the least interest. The snowball method (smallest balance first) pays off your first debt sooner, which keeps many people going.
How each method works
Both methods pay the minimum on every debt and put all extra money on one target debt. When it is paid off, its payment rolls onto the next target.
- Snowball: target the smallest balance first.
- Avalanche: target the highest interest rate first.
Sort your debts both ways
With debts in A2:D5 (name, balance, rate, minimum):
Snowball order: =SORT(A2:D5, 2, TRUE)
Avalanche order: =SORT(A2:D5, 3, FALSE)| Debt | Balance | Rate | Monthly interest |
|---|---|---|---|
| Store card | $680 | 26% | $14.73 |
| Credit card A | $2,400 | 22% | $44.00 |
| Car loan | $7,900 | 7% | $46.08 |
| Student loan | $12,500 | 5% | $52.08 |
Monthly interest is =Balance*Rate/12. In this example the smallest balance also has the highest rate, so both methods pay off the debts in the same order.
Which one to pick
If the orders differ, the avalanche saves more interest. If you have struggled to stay motivated before, the snowball's quick first win may be worth the small extra cost. The best method is the one you keep following.
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