Two popular debt-repayment strategies have different strengths. The snowball method targets the smallest balance first for quick wins. The avalanche method generally targets the highest interest rate first to reduce total interest, assuming required repayments continue and the rest of the loan terms are comparable.

How the two methods work

In both approaches, start by paying at least the required minimum on every account when you can. Use extra money toward one selected debt. With the snowball, that is the debt with the lowest outstanding balance. With the avalanche, it is the one with the highest interest rate. When the selected debt is cleared, redirect the freed payment toward the next priority.

A simple three-debt example

Imagine three loans: an account balance of R2,000 at a hypothetical 18% annual rate, another of R7,000 at 25%, and another of R15,000 at 12%. The snowball starts with R2,000. The avalanche starts with the R7,000 loan because 25% is the highest rate. Which feels easier may differ from which costs less. These invented rates are not product quotes, and an exact savings calculation would also need each loan's fees, repayment schedule, compounding and interest calculation method.

What if one account is almost finished?

Paying the R2,000 balance may deliver a quick psychological win and remove a repayment administration task. But if the 25% loan remains unpaid longer, interest charges can continue accumulating. The avalanche often produces a lower total interest cost with the same extra repayment and loan conditions, but this is not guaranteed when loans have unusual fees or different structures.

Make the strategy fit a real budget

Suppose your budget can support an additional R300 per month. Before promising R300, confirm all minimum payments, essential living expenses and a small emergency reserve. Check whether any account imposes a cost for early settlement or an extra payment, and whether payments go to principal. Contact the lender for the actual settlement balance and terms.

What neither method solves

If minimum repayments already exceed available cash, neither a snowball nor an avalanche can create money. Missing required payments can trigger fees, collection activity and other consequences. Seek assistance early and consider options under South Africa's National Credit Act, including regulated debt counselling where appropriate.

Choosing your starting point

  • List balances, rates, fees, minimums and due dates.
  • Compare total cost rather than rate alone.
  • If motivation is your main obstacle, a small-balance win may help.
  • If your objective is interest minimisation, compare an avalanche first.
  • Recalculate after a rate change or a settled account.

Bottom line

There is no shame in choosing a method you can actually follow. The important measurable outcomes are timely contractual payments where feasible, fewer outstanding balances and less interest paid over time. Do not take a consolidation loan without comparing its full cost and duration.

Sources and fact-checking

Official and institutional references consulted on 20 October 2026. Educational calculations are labelled as hypothetical. Rules and provider terms can change; always check the current original source.

Editorial disclosure: This article was prepared with AI assistance and editorial source checks. It contains no paid placements or affiliate links. For corrections, use our contact form.