Money & WorkHow it works
Two ways out of debt: one does math, one motivates.
List every debt with balance and interest rate. Pay the minimum on all of them. With the avalanche method, everything extra goes to the highest-rate debt, which mathematically saves the most. With the snowball method, you clear the smallest balance first so you see quick wins. Once one is paid off, its instalment rolls onto the next debt.
Useful: If you need motivation, take the snowball; if you can stay disciplined, the avalanche saves more interest.
Source: en.wikipedia.org