Comprehensive Guide to the Debt Snowball Method

Laura Broad[1]

Laura Broad

Money Savings Advice The debt snowball method

What Is the Debt Snowball Method?

The debt snowball method is a process by which you make minimum payments on all of your outstanding debts. Any spare money is used to top up repayments on your smallest debt to pay it off quicker, and then you move onto the next smallest debt.

Many people believe that the debt snowball method is as much about psychology as it is about finances. In reality, it would make sense to use any additional capital to repay your highest interest rate debt.

However, using the debt snowball method, you can physically see your debts dropping off, and this can give you an extra incentive.

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What Are the Individual Stages of the Debt Snowball Method?

There are four main stages of the debt snowball method which are:-

List Your Debts From Smallest to Largest

With this debt repayment method, you’re focusing on the level of debt as opposed to the level of interest charged. So, make a list of all of your debts in order of the smallest first.

Make Minimum Repayments on All Debts

You may have a credit card loan, personal loan and perhaps a store card. Make sure that you make the minimum repayments on all of your debts.

Additional Payments

Where you have additional capital this method directs you to pay off as much as possible on your smallest debt.

Rinse and Repeat

Repeat the process month by month, and eventually, the smallest debt will be repaid. Then you simply make minimum repayments on the remaining debts and focus any additional capital on the “new” smallest debt. Rinse and repeat.

Do I Include My Mortgage on the List?

No is the simple answer. As your outstanding mortgage debt is likely to be much greater than the combined value of your unsecured debts, it wouldn’t help to see this every time you checked your list.

From a psychological viewpoint, it would be unhelpful to be reminded each time you looked at the list that you had a debt which could run into hundreds of thousands of pounds. Even though your mortgage will be secured against your property, it would not be a useful reminder!

Surely I Should Be Repaying the Highest Interest Debt First?

It is fair to say that many experts would recommend focusing any additional capital on your highest interest debt. However, the idea behind the debt snowball method is so that you can physically see the number of individual debts slowly being reduced as the smallest debt is repaid in full.

In theory, as each individual debt is repaid in full, this should leave a greater surplus to go towards the next lowest debt.

Is There a Debt Snowball App?

As the whole idea behind the debt snowball method is so that you can physically see the number of individual debts reducing, you will find a number of debt snowball apps available for your smartphone.

While it can be easy to become obsessed with debt repayment, a regular look at your progress may well give you the incentive to increase additional repayments where affordable.

What Is the Debt Avalanche Method?

If you research the debt snowball method of debt repayment, you will no doubt come across the debt avalanche method, which is the flip-side of the coin. This is the more “natural” path many would assume, minimum payments across all of your outstanding debts with any surplus paid towards your highest interest debts - irrelevant of the amount outstanding.

Again, this would not include your mortgage debt and be more focused on unsecured debts.

How Does the Debt Avalanche Method Work?

There will be occasions where your smallest debt is the debt with the highest interest charge whereby the debt snowball and debt avalanche methods may actually come together. This method is very useful in reducing interest paid over a longer period of time, but sometimes it can be difficult to see any real progress on the surface.

You will find that debt management adviser will focus on high-interest debt where there is surplus capital available - above and beyond minimum repayments.

Should I Not Consider a Debt Consolidation Loan?

In theory, accumulating all of your debts into one debt consolidation loan could have a helpful impact on your monthly payments. Rather than having, for example, three or four minimum repayments per month, you would just have one. However, might you be tempted to make minimum repayments each month and spend any surplus capital elsewhere?

Finding a Balance Between Debt Repayments and Everyday Life

For your own peace of mind, you need to find a balance between debt repayments and everyday life expenses. If you spend the majority of your money paying off your debts, then this can lead to depression and other psychological issues.

On the flip side, if you only pay the minimum on your debts, then they will be with you for many years to come even though you may be living the dream. Finding a balance means that you can see progress with your finances while still enjoying the finer things of life.

Taking Control of Your Finances

Whether you are looking towards the debt snowball, debt avalanche or any other type of repayment strategy, it is important that you take control of your finances. If you can see regular progress in reducing your debts, this will give you an incentive to continue and even to make additional one-off repayments where possible.

When your finances are out of control, it can be difficult to make sensible decisions as the mental and physical pressure can very quickly build.

Should I Seek Debt Management Advice?

If you have any concerns or questions regarding the structure of your debts, then it would be sensible to seek professional advice. You may find that some relatively small tweaks can make a huge difference, and much of the pressure and concern for the future can be alleviated.


In many ways, debt repayment is as much in the mind as it is in your pocket. Yes, there is a natural pull towards making additional repayments to higher interest rate debt, but progress can appear relatively slow in the early days.

Many people will get a boost by using the debt snowball method where one by one the smallest debts are repaid in full, and the pool of repayment capital is spread across fewer and fewer debts.

How Can Money Savings Advice Help You Reducing Your Debt?

Here at Money Savings Advice, we have partnered with some of the UK’s debt release brokers. They have already helped thousands of people reduce and remove a high percentage of debt, and if you are struggling with debt, they can do the same for you.

Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these brokers, then click on the below and answer the very simple questions.


Money Savings Advice Author Laura Broad

Laura Broad

Laura is a professional content writer and learning designer, passionate about empowering people through straightforward, jargon-free content. When she's not reading or writing about all things personal finance, you can find her in the gym, barbell in hand.

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