The only difference is the order
Both columns use the same balances, the same rates, the same minimums, and the same extra amount. Each month the page adds interest, then pays each minimum, then pays the extra. Snowball chooses the open debt with the smallest balance. Avalanche chooses the open debt with the highest rate. If two debts tie, snowball breaks the tie toward the higher rate, and avalanche breaks it toward the smaller balance. A debt that hits zero drops out, and the minimum that used to go there becomes part of what the next debt receives. The extra payment is not split across every debt. It is aimed, and only the leftover cents, if the target debt was smaller than the extra, spill to the next debt in the same order.
Nothing in federal law names these two orders or requires one of them. They are labels for a choice about extra principal. The Consumer Financial Protection Bureau's explanation of credit-card interest describes how a card balance generates a finance charge. It does not rank snowball against avalanche. This page's interest step is the same cent method as the loan payoff calculator: round the balance in cents times the annual rate divided by 1,200. A card agreement that uses a daily periodic rate, or that includes new purchases in the average daily balance, can charge a different amount. The credit-card page follows a CFPB worksheet for one card, including a monthly rate rounded to hundredths of a percent. This page does not apply that hundredths step. Two cards here are two closed balances you type.
A sample that is not an average
The sample used to check the order is a debt called Small, $800 at 5 percent with a $25 minimum, and a debt called Large, $3,000 at 18 percent with a $60 minimum, plus $300 extra every month. Snowball's first payoff is Small. Avalanche's first payoff is Large. Avalanche's total interest, $259.12 over 11 months, is less than snowball's $338.32 over 12 months. Those totals are this schedule. They are not a statistic about American households, and the 5 percent and 18 percent figures are not typical rates. They are inputs that make the two orders point at different debts. If both debts had the same rate, the orders could still differ because one looks at the balance and the other, after a rate tie, looks at the balance too. If the extra payment is small and a minimum alone clears the cheap debt, the avalanche can still finish that cheap debt first. The check above uses $300 so that does not happen.
The form on this page starts at the same two balances with names Debt A and Debt B, and with $200 extra rather than $300. Snowball still finishes Debt A first, in 17 months, with $472.71 of interest. Avalanche finishes Debt B first, in 16 months, with $358.08 of interest. Change a rate or a minimum and both columns change. The page will not quietly prefer one column.
When the comparison refuses to run
If a minimum does not cover that month's interest, and the payment would not clear the balance, the balance would grow. The page stops and says so instead of running for years of rising debt. That stop is a property of the numbers you typed. It is not a judgment that the debt is impossible to repay. A larger payment, a lower rate from a creditor, or a hardship arrangement the creditor puts in writing can change the path. This calculator does not invent those offers.
Promotional rates that jump, deferred-interest plans, annual fees, and prepayment penalties are not in the four fields. A secured debt, such as a car or a mortgage, can have a reason to pay it that has nothing to do with the rate: the collateral. The payoff page is built for one installment loan and an extra principal payment, and it explains that a lender may apply extra money to future payments instead of to principal unless you say otherwise. The same caution applies here. An extra amount that the creditor does not treat as principal will not match either column.
Interest is not the only thing a person is buying
On this sample the avalanche costs less interest because the extra dollars hit 18 percent instead of 5 percent. That is the arithmetic. A snowball finishes the small balance sooner, and some people use that paid-off account as a reason to keep going. This page can show the months and the interest. It cannot weigh the reason. It also cannot see a debt that is in collections, a joint account, or a payment you might miss. Two debts are the form's width. The function allows more, but the page does not pretend a household's whole list is those two rows.
Giuseppe Ilarda, the site owner, writes and checks the two orders and the cent interest. The disclaimer applies. Nothing here is a debt-management plan, a consolidation offer, or a statement that one column is the right one for you. If a creditor's payoff quote and this schedule disagree, the quote is the amount that clears the account, and the interesting difference is the rate, the minimum, or the way extra payments are applied.