Snowball vs Avalanche for Three Debts Including a Gold Loan
See the payoff plans for a credit card, personal loan, and gold loan together, with Rs 15,000 extra a month.
This scenario's debts
- Credit card
- ₹1,00,000 @ 40%
- Personal loan
- ₹2,50,000 @ 15%
- Gold loan
- ₹80,000 @ 9%
- Extra monthly payment
- ₹15,000
Snowball
Months to debt-free
18
Total interest paid
₹65,
Avalanche
Months to debt-free
17
Total interest paid
₹51,
Related questions
Snowball targets the gold loan first since it has the smallest starting balance, even though it carries the lowest interest rate of the three, which is the tradeoff snowball makes for early psychological wins.
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Avalanche minimizes total interest paid; snowball can build momentum by clearing small debts fast. Assumes constant rates and on-time payments every month.