Loans & Credit

What Is the Debt Snowball Method?

The debt snowball method is a repayment strategy in which a borrower makes minimum payments on all debts and puts any extra money toward the smallest balance first, regardless of interest rate. When that balance is cleared, its payment rolls into the next-smallest debt, building momentum like a snowball.

How It Works

List debts from smallest to largest balance. Pay the minimum on each, and send any extra to the smallest one. After it is paid off, add its payment to the next debt on the list.

Snowball vs. Avalanche

The snowball method closes individual accounts faster, which some people find motivating. The avalanche method, which targets the highest interest rate first, usually results in lower total interest. The difference depends on the balances and rates involved.

🧮 Calculate It Yourself

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🔗 Related Terms

Debt Avalanche Method Minimum Payment Budget

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.