Debt Elimination Strategies Explained
- 🌋 Debt Avalanche: Target debts with the highest interest rate (APR) first. Saves the maximum total interest mathematically.
- ❄️ Debt Snowball: Target debts with the smallest total balance first. Provides fast psychological wins by eliminating entire accounts quickly.
Monthly Budget Impact Table ($35,000 Combined Debt @ 16.5% APR)
| Dedicated Monthly Payment Budget | Months to Debt-Free | Payoff Horizon | Total Interest Paid | Interest Saved |
|---|---|---|---|---|
| $750 / Month | 71.2 Months | ~5.9 Years | $18,400 | Baseline |
| $950 / Month | 49.8 Months | ~4.1 Years | $12,310 | +$6,090 Saved |
| $1,250 / Month | 34.5 Months | ~2.9 Years | $8,125 | +$10,275 Saved |
Frequently Asked Questions
What is the difference between Debt Avalanche and Debt Snowball?
Debt Avalanche prioritizes paying off debts with the highest interest rates first, mathematically minimizing interest paid. Debt Snowball prioritizes paying off the smallest balances first to build quick psychological momentum.