Guide · Money · About a 5-minute read
The debt snowball method (UK): how it works, with a worked example
The debt snowball is a simple way to pay off credit cards, store cards and loans one at a time. You clear the smallest balance first, then roll that payment onto the next one. Here's how to do it step by step, a worked example in pounds, and how it compares with the avalanche method.
Before you start: priority debts come first
In the UK some debts matter more than others because the consequences of missing them are serious: rent or mortgage, council tax, gas and electricity, TV licence, child maintenance and court fines. Keep those paid first. If you're behind on any of them, talk to a free adviser before you start a snowball (links at the bottom of this page).
How the debt snowball works in 5 steps
- List every non-priority debt. Write down the balance, interest rate (APR), minimum payment and due date for each one.
- Sort them from the smallest balance to the largest. Ignore the interest rate for now.
- Set one monthly figure you can put towards debts, a bit more than all the minimums added together.
- Pay the minimum on everything, and the rest on the smallest debt.
- When one is cleared, roll its payment onto the next. The amount going to each new target keeps growing.
A worked example
These are example figures, not real accounts. Three debts, with minimum payments of £235 a month in total:
| Debt | Balance | APR | Minimum |
|---|---|---|---|
| Store card | £450 | 19.9% | £25 |
| Credit card | £2,200 | 29.9% | £60 |
| Car finance | £4,800 | 9.9% | £150 |
Say you can put £335 a month towards them, £100 more than the minimums. Using the snowball, the store card goes first, then the credit card, then the car finance. Worked through month by month (interest added monthly at APR divided by 12):
- The store card is cleared in month 4.
- The credit card is cleared in month 18.
- Everything is paid off in 27 months (about 2.2 years), with about £1,324 paid in interest.
Paying only the minimums on the same three debts takes 44 months (about 3.7 years) and costs about £2,866 in interest. The avalanche method (credit card first, because it has the highest rate) finishes in 27 months (about 2.2 years) with about £1,278 in interest.
So in this example the snowball and avalanche end up close, and either beats paying the minimums by a long way. The snowball gets you your first cleared debt sooner, which is why many people prefer it.
Snowball or avalanche?
- Avalanche (highest rate first) saves the most interest, especially when one debt has a much higher rate and a big balance.
- Snowball (smallest balance first) gives quick wins, so it's easier to stay motivated.
- If two debts are close in size, put the higher-rate one first. You get the best of both.
Tips that make it stick
- Put the plan on the fridge. A progress bar you colour in each month works better than an app you forget to open.
- Stop adding to the debts. Cut up or freeze the store card once it's cleared.
- Send windfalls to the target debt. A tax refund or Christmas money can knock months off.
- Check for 0% balance transfers only if you can clear the balance before the offer ends, and watch the transfer fee.
Free UK debt advice
If the minimums are already too much, a snowball won't fix it on its own. These services are free and confidential:
- StepChange
- National Debtline
- Citizens Advice
- MoneyHelper (backed by the government)
Frequently asked questions
- What is the debt snowball method?
- You list your debts from the smallest balance to the largest, pay the minimum on all of them, and put every spare pound towards the smallest. When that one is cleared, its payment rolls onto the next smallest, so the amount you throw at each debt grows like a snowball.
- Is the snowball or the avalanche method better?
- The avalanche method (highest interest rate first) usually costs less interest. The snowball method (smallest balance first) gives you quicker wins, which helps many people keep going. The best one is the one you'll actually stick to.
- Should I use the snowball method on council tax or rent arrears?
- No. Rent or mortgage, council tax, energy and court fines are priority debts in the UK because missing them can lead to losing your home, enforcement agents or your supply being cut off. Deal with those first and get free advice. The snowball is for credit cards, store cards, loans and overdrafts.
- Where can I get free debt advice in the UK?
- StepChange, National Debtline, Citizens Advice and the government-backed MoneyHelper all give free, confidential debt advice. You never need to pay a company for debt help.
- Can I do the debt snowball on paper?
- Yes. A printed list of debts and a progress bar for each one is all you need. Ticking off a cleared balance is the point of the method.
Want it on paper?
Our Debt Snowball Payoff Planner is a printable A4 PDF: a page to list every debt, both methods explained in plain English, six debt pages with colour-in progress bars, a month-by-month snowball plan and a debt-free thermometer for the fridge, plus the free UK advice services. It's £2.99, and the PDF is emailed to you after payment (usually within a few hours, always within 12 hours).
Get the debt snowball planner · £2.99
Budgeting for the whole year too? Read how to make a household budget (UK).