When several debts compete for your money, choosing what to pay next can feel more difficult than making the payment. A written order reduces that repeated decision. Two familiar approaches are the avalanche and the snowball.
Put every obligation on one page
Record the balance, interest rate, required minimum, due date and any promotional-rate expiry. Keep secured debts, essential bills and obligations with serious consequences in view. A simple interest-rate ranking does not replace checking overdue amounts or the risk of losing an essential service.
What the avalanche prioritises
With the avalanche method, make required payments on all debts and direct extra money to the highest interest rate. Under comparable terms and a consistent total payment budget, this usually reduces interest more efficiently. When a debt is cleared, move the released payment to the next highest rate.
What the snowball prioritises
The snowball directs extra money to the smallest balance while you maintain other minimums. It can produce a quicker first payoff, which some people find easier to stick with. The trade-off is that a larger, more expensive debt may continue accumulating interest while you clear a cheaper small balance.
Compare the same example
Suppose debt A is ₦40,000 at 10% annual interest and debt B is ₦150,000 at 30%. After minimums, you have ₦15,000 extra each month. The avalanche targets B; the snowball targets A. Do not compare one plan using ₦15,000 extra with another using ₦25,000. Different payment budgets would hide the effect of the strategy itself. These rates are fictional and exclude fees.
Check whether the payment actually makes progress
At a simplified 24% APR, a ₦100,000 balance produces approximately ₦2,000 interest in the first month when calculated as APR divided by 12. A ₦2,000 payment would cover only that interest. If payments are unaffordable, contact the lender early to discuss available arrangements. Use the homepage debt calculator for one fixed-rate balance, and compare its assumptions with the actual agreement.
Further reading: CFPB: How to reduce your debt. Sources checked 16 September 2026. Examples and calculations are illustrative; this article provides general financial education.
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