Avalanche vs Snowball — Find the fastest, cheapest path to debt freedom
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Open KOHO — Code: 45ET55JSYAThere are two popular strategies for paying off multiple debts. Both require you to make minimum payments on all debts, then direct any extra payment capacity toward one target debt at a time.
Debt Avalanche: Target the highest-interest-rate debt first. Once it's paid off, roll that payment onto the next highest rate. This is mathematically optimal — you pay the least total interest and get out of debt fastest in terms of money saved.
Debt Snowball: Target the smallest balance first regardless of interest rate. Once paid off, roll the payment onto the next smallest balance. This creates psychological wins — each paid-off debt is a dopamine hit that keeps you motivated.
Research from Harvard Business School and Wharton suggests the snowball method leads to higher completion rates because motivation matters more than math for many people. The right method is the one you will actually stick to.