Same debts. Same total monthly payment. Change nothing but the order you clear them in, and you change how much interest you hand over before you are free — and how long it takes.
Most advice picks a side and moves on. Both orderings are run against identical numbers below, so you can see the actual size of the trade-off before deciding which one you'll stick to. Because the strategy you finish always beats the strategy that is cheaper on paper.
The two strategies
Avalanche: highest interest rate first. Pay minimums on everything, then throw every extra rupee at the debt with the highest interest rate. Once it's cleared, roll that payment into the next-highest rate. Mathematically, this minimises total interest paid: it's the cheapest path out, full stop.
Snowball: smallest balance first. Pay minimums on everything, then attack the smallest balance regardless of its rate. It usually costs more in interest, but clearing a debt entirely (even a small one) produces a visible win early, which is what keeps people going when the finish line still feels far off.
A worked example
Take someone with three debts and LKR 25,000 a month of spare capacity beyond minimum payments:
| Debt | Balance | Rate | Minimum payment |
|---|---|---|---|
| Credit card | LKR 150,000 | 28%* | LKR 7,500 |
| Store instalment plan | LKR 60,000 | 20%* | LKR 3,000 |
| Personal loan | LKR 400,000 | 16%* | LKR 12,000 |
Illustrative rates for this example. Actual credit card, instalment, and personal loan rates vary by lender and change with the Central Bank's policy rate, which stood at 7.75% with the Average Weighted Prime Lending Rate around 9% in early 2026. Check your own statements for your real numbers.
Running both strategies month-by-month, applying interest, minimums, and the full LKR 25,000 extra to whichever debt is currently the target:
| Avalanche (highest rate first) | Snowball (smallest balance first) | |
|---|---|---|
| Order attacked | Credit card → Store plan → Personal loan | Store plan → Credit card → Personal loan |
| First debt cleared | Credit card, month 5 | Store plan, month 3 |
| Second debt cleared | Store plan, month 7 | Credit card, month 8 |
| All debt cleared | Month 18 | Month 18 |
| Total interest paid | LKR 78,733 | LKR 86,769 |
Source: modelled by Salli using standard amortisation (monthly interest accrual, minimums paid first, remaining extra budget applied to the current target debt, freed-up minimums rolled forward once a debt clears).
What actually changes (and what doesn't)
Both strategies took exactly the same 18 months to clear all three debts. That's not a coincidence: the same total amount of money went toward debt every month in both scenarios, just directed differently. Order doesn't buy you extra time when your monthly capacity is fixed, because the personal loan, being the largest balance, was always going to be the last one standing either way.
What order does change is interest: avalanche saved LKR 8,036 over snowball in this example, because the 28% credit card balance spent less total time accruing interest at the highest rate. That gap grows with higher rate spreads and larger balances, and shrinks the closer your debts' rates are to each other.
What snowball buys instead is a cleared debt by month 3 rather than month 5. That's a real account closed, a real line disappearing from your statement, five months sooner. For some people that visible progress is the difference between sticking with a payoff plan and quietly abandoning it around month six.
Which one should you pick?
If the interest-rate spread between your debts is small, the cost of choosing snowball is small too, so take the motivation. If the spread is large (a 28% card next to a 12% loan, say), the gap compounds fast, and it's worth the discipline of avalanche.
The honest answer is that the best strategy is the one you'll actually follow through on. A mathematically optimal plan abandoned in month four costs more than a "worse" plan finished in month eighteen. This is why Salli's debt planner shows both schedules side by side against your real balances and rates, rather than picking one for you, so you can see the actual rupee cost of motivation before you decide it's worth paying.
Run it on your own debts
The numbers above are illustrative. Yours depend on your actual balances, rates and minimums, and the gap between the two strategies can be trivial or substantial depending on how far apart your interest rates are.
Salli models both orderings against your real debt schedule, shows the total interest and the payoff date for each, and — because the same ledger carries your assets and your tax position — tells you what clearing a debt early costs your Freedom date.
Sources
- Sri Lanka Interest Rate: Trading Economics
- 2026 Lending Rates in Sri Lanka: AWPLR Forecast and Borrowing Strategies, Lanka Websites
The worked example above uses illustrative rates and a simplified monthly-compounding model for clarity, but your own lender's compounding method, fees, and rates will differ. Always check your actual loan agreements before making payoff decisions.
