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What Is The Debt Snowball Method?

Miranda Crace7-Minute Read
UPDATED: July 27, 2023


When you’re paying off multiple big debts, making the minimum payments each month may not feel like you’re making progress. If you really want to be debt-free – and you have enough money set aside for other monthly expenses – a debt payoff strategy known as the debt snowball method can get the proverbial ball rolling.

Let’s look at how a debt snowball can help you pay off your debts, plus explore how this method works and how you can get started today.

How The Debt Snowball Method Works

The idea behind a debt snowball is starting small and building your debt repayment plan up from your smallest debt to the largest. This will allow you to enjoy some tangible, early wins when paying off a pile of debt.

With this plan, you’ll continue making the minimum payments on your larger debts, but you’ll allocate any extra funds you have toward your smaller balances. Once your smallest debt is completely paid off, put those same funds toward your next smallest balance and continue this approach until you’ve repaid all your debts.

Unless your smallest debts are the ones with higher interest rates, the snowball method may not save you much in interest compared to other debt repayment methods. However, completely paying off some debts early on can give you a healthy sense of accomplishment and encourage you to keep going until you’re debt-free.

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How To Start A Debt Snowball

Creating a successful debt snowball will require careful budgeting and preparation. Follow the steps below to organize your debt.

1. Add Up Your Debts

The first order of business is adding up all your non-mortgage debts – including auto and student loans. Next, calculate your debt-to-income ratio (DTI). Understanding how much debt you owe will help keep you motivated as you move forward.

2. Organize Your Debt

Next, organize your debts from smallest to largest. As mentioned above, continue making the minimum monthly payment(s) on all but your smallest debt. When that’s paid, dedicate that money – in addition to the minimum monthly payment you’ve been making – toward paying off your now-smallest debt.

3. Focus On Your Smallest Debts

Your smallest debt is your target. Every spare dollar gets thrown at it until it’s gone. Then, start on your new target – your now-smallest debt – by attacking it with everything you threw at the previous debt, plus a little more money when you can.

4. Gather Debt Snowflakes

Once you get your debt snowball started, the best way to make it bigger is to pack in every debt snowflake that comes your way. In debt terms, that means committing to a rule that every dollar you find – including raises, bonuses, and extra funds earned from any side hustles – goes toward paying off that smallest debt.

When you find a $20 bill in a pair of shorts you haven’t washed since last summer, it goes toward your debt. Did you recently get a rebate check or win a 50/50 at a civic event? Right toward your debt it goes.

You’ll be surprised how quickly any money you’ve found, or debt snowflakes, can make an impact on your smallest debt when you add it all up.

Debt Snowball Vs. Debt Avalanche

The debt avalanche is a competing method for paying off your debt. The debt avalanche method assumes that it makes more financial sense to pay off your highest-interest debt first, and it organizes your repayment strategy accordingly. For example, your highest-interest credit card debt would be your first target, followed by your second-highest interest debt and so on.

The debt avalanche method could save you money in the long run, but you may not experience those early and frequent payoff victories like you would with the debt snowball method.

Debt Snowball Pros And Cons

While you’re deciding on the best debt repayment method, consider the advantages and disadvantages of the snowball method.


  • Seeing your smaller debts disappear can motivate you to continue.
  • Snowballing your debt allows you to focus on one debt at a time.
  • This method simplifies debt repayment because you focus just on the size of a particular balance, rather than the interest rate or annual percentage rate (APR).


  • You may pay more in interest over time by just focusing on your smaller debts.
  • Debts could take longer to pay off with compound interest.

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FAQs About The Debt Snowball Method

What method is best for high-interest credit card debt?

If you have a serious amount of high-interest credit card debt – and especially if that debt is spread over several accounts – you might benefit more from debt consolidation. With a debt consolidation loan, you can pay off all those balances and repay the loan with one monthly payment at a potentially lower interest rate.

If you’re interested in debt consolidation, a personal loan is a popular option for many borrowers.

Which is better: the debt avalanche or debt snowball?

Choosing the better method for you depends on what you ultimately want from a debt repayment plan. Do you want the early and frequent victories of paying off your smallest debts, or would you rather save money by paying down your higher-interest debts first?

The best debt repayment plan is the one you stick to and the one that’ll get you closest to your ultimate goal: financial freedom. Being debt-free can lift a tremendous burden and allow you to take control of your financial future.

However, neither of these methods will work unless you rein in your credit card spending.

Which Method Should I Use, The Snowball Or Avalanche?

The best debt repayment plan is the one you stick to and that will get you to its ultimate goal: financial freedom. Being debt-free lifts a tremendous burden from you and allows you to take control of your financial future.

The differences between the debt snowball and the debt avalanche are psychological as well as financial. Don’t discount the psychological impacts of those early victories. For many, it’s the difference between creating new and healthier habits and falling back into old ways. 

Be forewarned, however. Neither of these methods will work unless you reign in your credit card spending. The hardest part of debt repayment just might be resisting the temptation to use the credit now available to you. It’s another good reason to hand the cards over to someone else, particularly before you start to see the light at the end of the debt tunnel.

Final Thoughts: Snowflakes, Snowballs And Avalanches Can Melt Your Debt Away

Extra payments toward debt, if you can afford to make them, can bring you closer to a debt-free life, and the debt snowball method can give you a direct target to aim for. Paying your debts off smallest to largest can mean earlier payoff for some of your lower balances - and a sense of accomplishment with each one paid off - even if it doesn't save you as much in interest as a debt avalanche. Figure out your priorities and choose the best method for your goals.

If debt consolidation seems like a better option for any high-interest credit card debt you have, apply online today with Rocket Loans to see what personal loan rates you qualify for.

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Miranda Crace

Miranda Crace is a Senior Section Editor for the Rocket Companies, bringing a wealth of knowledge about mortgages, personal finance, real estate, and personal loans for over 10 years.