Debt Snowball and Debt Avalanche both start by paying at least the minimum due on every account, then applying extra money to one target balance at a time. Snowball targets the smallest balance; Avalanche targets the highest interest rate. The linked video discusses debt management and family planning but does not compare these two methods.
Compare the two approaches
- Snowball: Order debts from the smallest balance to the largest. This may let you close an account sooner, while total interest depends on the actual rates and terms.
- Avalanche: Order debts from the highest interest rate to the lowest. If other conditions are equal, this may reduce interest costs, but the first target can take longer to pay off.
Choose using your actual numbers
- Collect balances, rates, payments, due dates, and fees from statements or contracts.
- Keep all minimum payments current before directing extra money to a target debt.
- Choose an approach that fits your goals and that you can continue, considering both cost and motivation.
- Review the results when rates, extra payments, or contract terms change.
If your cash flow is not enough to cover minimum payments, comparing these two methods may not be the first step. The Bank of Thailand recommends listing debts and contacting creditors to ask about restructuring options based on repayment ability. Before accepting an offer, check its effect on the total amount, term, and credit history.
Read more about Debt Snowball and Debt Avalanche, then compare repayment schedules with the debt payoff planner.
Official references
These methods do not guarantee a particular result and do not replace reading your agreements. The video offers general context about debt rather than explaining Snowball or Avalanche.