Imagine three debts: a £1,200 overdraft at 10 percent, a £5,000 store card at 27 percent, and a £10,000 personal loan at 8 percent, with £450 a month to put toward all of them. The avalanche method attacks the 27 percent store card first because it costs the most, and clears everything in about 44 months for roughly £3,166 in interest. The snowball method targets the £1,200 overdraft first for a quick win, and takes the same 44 months but costs about £3,505 in interest. Avalanche therefore saves around £339 here. The months match in this case, but avalanche always costs less or the same, because directing spare cash at the highest rate slows the fastest-growing balance.
Method
Total interest
Avalanche (highest APR first)
£3,166
Snowball (smallest balance first)
£3,505
Months to debt-free (both)
44
Avalanche saving
£339
How it is calculated
The tool simulates your debts month by month under two strategies. Both apply interest to every balance at one twelfth of its APR each month, then share your total monthly payment across the debts, but they differ in priority order. Avalanche sorts debts by interest rate and throws all spare cash at the highest-rate balance once minimums are covered, which is mathematically optimal and always pays the least total interest. Snowball sorts by balance size and clears the smallest debt first, which gives faster psychological wins that research suggests help people stick with the plan. As each debt is cleared, its payment rolls onto the next, accelerating the payoff. The comparison shows the months to debt-free and the total interest for each so you can weigh the cost of motivation against the cost of maths. The figures assume rates and your total payment stay fixed throughout.
Frequently asked questions
Avalanche vs snowball?
Avalanche pays highest-APR debt first, saves most money. Snowball pays smallest balance first, gives quick wins and momentum. Behavioural studies suggest people are more likely to complete with snowball, but they pay more interest.
Does the debt payoff method affect my credit score in the UK?
The method you choose does not directly affect your credit score, but paying off debts does. Clearing accounts reduces your overall credit utilisation ratio, which the main UK credit reference agencies (Experian, Equifax, TransUnion) treat as a positive signal. Consistent on-time payments matter more than which debt you clear first.
Should I include my mortgage in a UK debt payoff plan?
Most UK personal finance advisers recommend excluding your mortgage from an avalanche or snowball plan because mortgage rates are typically far lower than credit card or personal loan rates. Focus extra payments on unsecured, high-rate debts first. Once those are cleared, overpaying your mortgage can save significant interest, but check your lender's early repayment charge policy before doing so.
What counts as the minimum payment on UK credit cards?
UK credit card issuers are required by the Financial Conduct Authority to set a minimum payment that at least covers the interest charged plus 1 percent of the outstanding balance, so it always reduces the principal by a small amount. Some older agreements set a flat percentage of the balance as the minimum. Paying only the minimum dramatically extends the repayment period, so this calculator assumes your total monthly amount is spread across debts above any contractual minimums.