Debt snowball

The debt snowball means clearing your smallest balance first, then rolling that freed-up payment into the next smallest, and so on. It costs a little more in interest than the avalanche, but the early wins keep you motivated to finish.

How it works

List your debts by balance, smallest to largest, ignoring the interest rate. Pay the minimum due on all of them, and put every spare rupee on the smallest balance until it is gone. Then take the full payment you were making on it and add it to the next-smallest debt, which now clears faster, and repeat. The payment “snowballs”: it grows larger as each debt falls, speeding up the ones that remain.

Why it works for people, not spreadsheets

On pure maths, the debt avalanche, highest rate first, is cheaper. The snowball’s strength is psychological: knocking out a whole debt early, even a small one, gives a visible win and a burst of motivation, and crossing debts off the list keeps people going. For anyone who has stalled on repayment before, that momentum can matter more than the small extra interest.

Choosing between the two

Pick the avalanche if you are driven by the numbers and want to pay the least. Pick the snowball if you need quick wins to stay the course. Either beats paying only the minimum and drifting. See the way out in how to get out of credit card debt.