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A debt payoff order that targets the smallest balance first, regardless of interest rate, while paying minimums on everything else.
Why It Matters
The snowball clears individual debts sooner, which some research links to higher completion rates — people who see a balance reach zero are more likely to keep going. It typically costs more in total interest than the avalanche, because higher-rate balances keep compounding while smaller ones are cleared. The two methods trade arithmetic against follow-through, and which matters more depends on the individual.
Key Points
- Pay minimums everywhere; put anything extra toward the smallest balance.
- Clears individual debts sooner, which can help people stay with the plan.
- Usually costs more total interest than ordering by rate.
Related Terms
Common Questions
A debt payoff order that targets the smallest balance first, regardless of interest rate, while paying minimums on everything else. The snowball clears individual debts sooner, which some research links to higher completion rates — people who see a balance reach zero are more likely to keep going. It typically costs more in total interest than the avalanche, because higher-rate balances keep compounding while smaller ones are cleared.
The snowball clears individual debts sooner, which some research links to higher completion rates — people who see a balance reach zero are more likely to keep going. It typically costs more in total interest than the avalanche, because higher-rate balances keep compounding while smaller ones are cleared. The two methods trade arithmetic against follow-through, and which matters more depends on the individual.
Pay minimums everywhere; put anything extra toward the smallest balance.
Clears individual debts sooner, which can help people stay with the plan.
Usually costs more total interest than ordering by rate.