Two debt payoff orderings dominate the advice given to borrowers with several balances. They differ only in how the extra payment is directed, and that single choice produces measurable divergence.
Both methods rely on the same freed-up payment
Each method pays the minimum on every debt and directs all surplus cash at one target debt until it clears.
When that debt is gone, its payment is added to the surplus and aimed at the next target, so the amount attacking each successive debt grows.
The total monthly outlay stays constant throughout, which is what makes either method sustainable on a fixed income.
Avalanche minimises interest by targeting rate
The avalanche orders debts by interest rate, highest first, without regard to balance size.
Because the most expensive debt is eliminated soonest, less interest accrues across the whole plan and the total repaid is lower.
The saving is real but often modest, and it is largest when the rate spread between the debts is wide.
Snowball targets balance and produces faster closures
The snowball orders debts by balance, smallest first, so the first account clears sooner than it would under the alternative.
Closing an account is a discrete, visible event. The number of open debts falls, and the number of monthly obligations to track falls with it.
Where the smallest balance also carries a high rate, the two methods agree and the question does not arise.
The divergence depends on the shape of the debts
If balances and rates are ranked the same way, the two orderings are identical and the debate is empty.
The methods separate when a large balance carries the highest rate. Avalanche then attacks a debt that will take many months to clear, delaying the first closure considerably.
That delay is where the cost of snowball comes from, and it is also where snowball's argument lies: a plan abandoned in month four saves nothing at all.
Completion rate matters more than the interest gap
The interest advantage of avalanche is fixed and calculable at the start. The probability that a borrower finishes the plan is not.
Since the payment schedule is identical under both methods, the only real difference in outcome comes from whether the borrower keeps going.
A hybrid is common: clear one small balance first to establish momentum, then reorder by rate for the remainder, which captures most of both effects.