What is the debt snowball vs avalanche method?

The snowball method pays off your smallest debt first for psychological wins, then rolls that payment into the next smallest. The avalanche method pays off the highest interest rate debt first, saving more money overall. Mathematically, avalanche is better; psychologically, snowball keeps you motivated.

How can I pay off debt faster in Australia?

Focus on one debt at a time while making minimums on others. Use the avalanche method to minimise interest. Consider consolidating high-interest debts into a lower-rate personal loan. Put any windfalls (tax refunds, bonuses) directly toward debt rather than spending them.

Debt Payoff Calculator Australia

Snowball vs Avalanche: Which Is Better?

Avalanche method: Pay minimum on all debts, then throw extra money at the debt with the highest interest rate. This mathematically saves the most interest. Snowball method: Pay minimum on all debts, then throw extra money at the smallest balance first. You clear debts faster (psychologically motivating), but pay slightly more interest overall.

Research shows the snowball method has a higher success rate because the quick wins keep you motivated. But if you're disciplined, avalanche saves more money. This calculator lets you compare both side-by-side.

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Methodology & sources

This calculator uses current published rates from Australian government and regulator sources. The result is an estimate for general guidance — it does not constitute personal financial advice. For decisions about your circumstances, consult a registered financial adviser, tax agent, or other professional. See editorial standards for how DecisionLab sources and updates its calculator data.

Estimates only. This calculator is not intended to be relied on for making a decision about a financial product, and it does not consider your objectives, financial situation or needs. Consider obtaining advice from an Australian financial services licensee before making any financial decisions. Assumptions can be changed where shown; statutory rates are as legislated for the year stated on this page. How our calculators work, their assumptions and limitations →