The snowball: clear the smallest balance first, then roll its payment into the next. It costs more interest than the avalanche and it works, because finishing a debt is what keeps people going.
Also called: snowball method, debt payoff plan.
28 months and ₹74,220 of interest, clearing debts in this order: Debt 1, Debt 3, Debt 2. Smallest balance first, which clears a debt sooner and costs a little more interest.
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Every debt gets its minimum, and everything spare goes to the smallest balance. When it clears, its whole payment rolls onto the next smallest, so the amount attacking the debt grows each time one falls. It is not the cheapest order, and the behavioural case for it is real: the first debt disappears quickly, which is what stops people abandoning the plan in month four.
pay minimums on everything, then throw everything spare at the smallest balanceEach of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.
Months to clear everything28
arithmetic identity on the budget
Open this exampleMonths to clear everything8
boundary
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