Debt Snowball vs Avalanche: What Our Data Shows

The snowball method tells you to pay off your smallest debt first for a quick psychological win. The avalanche method says to target the highest interest rate first to minimise total interest paid. Both approaches have passionate advocates, and the academic literature is split on which produces better real-world outcomes. We wanted to see what our own users experience.

Across our beta cohort, users who chose the avalanche method paid less interest on average, which is mathematically inevitable when rates differ significantly. However, users who chose the snowball method were markedly more likely to still be actively following their plan after three months. The completion gap was meaningful: snowball users showed stronger retention and more consistent extra payments.

Our takeaway is not that one method wins. It is that the best method is the one you actually follow. FIQ Personal lets you switch between snowball and avalanche at any time and immediately see how the change affects your payoff timeline and total interest. This means you can start with whatever feels right, monitor your own behaviour, and adjust if momentum stalls.