Both methods work — the difference is what they optimise
If you have more than one debt — a credit card, a personal loan, that BNPL balance — the question isn't whether to pay them down, it's in what order. Two methods dominate, and they optimise for different things: the avalanche for maths, the snowball for motivation. The best one is the one you'll actually finish.
The avalanche: highest interest first (cheapest)
Pay the minimum on everything, then throw every spare rupee at the debt with the highest interest rate — usually the credit card at ~40% — regardless of its size. When it's gone, roll that payment onto the next-highest rate. Mathematically this is the cheapest route: you kill the most expensive interest first, so you pay the least overall.
The snowball: smallest balance first (most motivating)
Pay the minimum on everything, then attack the smallest balance first, whatever its interest rate. Clear it, feel the win, and roll that payment onto the next-smallest. It costs a little more in interest than the avalanche, but it delivers early, visible victories — and since most people quit debt payoff from discouragement, not from bad maths, that momentum is often what gets the job done.
Which should you pick?
- --Choose avalanche if you're motivated by numbers and want to pay the least possible — especially if one debt has a punishing interest rate.
- --Choose snowball if you've tried and stalled before, or you have several small debts and need a quick win to believe it's working.
- --Either way, the engine is the same: a clear picture of every balance, a fixed amount aimed at one target, and the freed-up payment rolled to the next. That needs a real budget — see how to make a monthly budget.
The prerequisite: a small buffer first
Before you go hard at debt, park a small starter emergency fund — even ₹10,000–₹20,000. Otherwise the next surprise expense goes straight back onto the card, and you're running to stand still.
Frequently asked questions
What is the difference between the debt snowball and avalanche?
The avalanche pays off the highest-interest debt first (cheapest overall). The snowball pays off the smallest balance first (most motivating). Both pay minimums on everything else and roll each freed-up payment onto the next target.
Which is better, snowball or avalanche?
The avalanche saves the most money mathematically. The snowball works better psychologically because early wins keep you going. Since most people quit from discouragement rather than bad maths, pick the one you’ll actually stick with.
Should I save or pay off debt first?
Build a small starter emergency fund first (₹10,000–₹20,000), then attack debt aggressively. Without a buffer, the next unexpected cost lands back on the credit card and undoes your progress.
How do I keep track of paying off multiple debts?
List every balance, minimum and interest rate in one place, aim a fixed extra amount at your chosen target each month, and roll that payment forward as each debt clears. A budget and expense tracker keeps the freed-up cash from leaking elsewhere.
How Snugtab helps
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