Pay off debts faster: snowball and avalanche
Two simple methods for paying off several debts at once. The animation shows how they differ and what they give you.
What it is about
You have several debts. You pay the minimum on all of them and throw every extra zloty at one chosen debt. When it is gone, its payment goes to the next one.
- Snowball — you start with the smallest debt. Something disappears quickly and you want to keep going.
- Avalanche — you start with the debt with the highest interest rate. You pay less interest.
- Every debt gets its minimum payment. The extra 400 zł goes to one chosen debt.
- The snowball hits the smallest debt, the avalanche the most expensive one.
- A paid-off debt hands its payment to the next one, so the payoff speeds up.
- The end: both methods finish together. The snowball gives a faster first win, the avalanche less interest.
Is it worth it
Yes. In the example, minimum payments alone take 52 months and cost 6,852 zł in interest. With an extra 400 zł a month: 24 months and less than 3,000 zł in interest.
| Method | First debt gone | Debt-free | Interest |
|---|---|---|---|
| Minimum payments only | after 21 months | after 52 months | 6,852 zł |
| Snowball | after 5 months | after 24 months | 2,982 zł |
| Avalanche | after 12 months | after 24 months | 2,722 zł |
Which one to choose
- Need a quick win so you don't give up? Snowball.
- Every zloty counts and you are patient? Avalanche.
- The best one is the one you will stick with to the end.
How to do it in the app
The Debt payoff template builds the plan for you: you choose the order, and the payments go to the Budget and to Plan.
Where do I find the extra amount?
Start small, even 100 zł. Check in Reports what you spend the most on and move part of that money.
Does the example match my debts?
No. It is a simplified example for learning. Your payments, fees and interest may differ — check your agreements.