What is the difference between snowball and avalanche?

Snowball pays off your smallest balance first, regardless of interest rate. When that debt hits zero, its payment rolls into the next smallest. The psychological win of killing a debt quickly keeps you motivated. Avalanche targets the highest interest rate first, which minimises the total interest you pay — it is mathematically optimal. Both methods pay the minimum on every debt each month and direct any extra payment to the priority debt.

Which method is better — snowball or avalanche?

Avalanche always saves the most interest in theory. But research (notably a 2016 Harvard Business Review study) shows that people using the snowball method are more likely to actually finish paying off their debt, because the early wins keep motivation high. If the interest difference is small (under a few thousand rand), snowball may be the better real-world choice. If the difference is large — especially with high-rate debts like credit cards — avalanche can save you significantly more money.

What counts as the "extra payment"?

The extra payment is any money you can throw at your debt above and beyond all the minimum payments. It is the fuel that makes both strategies work. Without it, you are paying only minimums and will take the maximum amount of time (and interest) to clear your debt. Even R200-R500 per month makes a big difference — the calculator shows exactly how much.

Should I consolidate my debts instead?

A consolidation loan can make sense if the new interest rate is meaningfully lower than the weighted average of your current debts, AND the monthly payment is affordable. The danger is that consolidation frees up your credit cards and store accounts — if you run them up again, you end up worse off. A good rule: consolidate only if you close the old accounts and commit to not taking on new debt.

What about my home loan / bond — should I include it?

You can, but most people treat the bond separately because it has a much lower interest rate (prime or below) and a much longer term. The snowball/avalanche strategy works best for consumer debt: credit cards, personal loans, store accounts, car finance. If you want to see the impact of extra bond payments, try the Bond Affordability calculator instead.

What interest rates are typical in South Africa?

As of mid-2026: credit cards 18-25%, store accounts 20-28%, personal loans 12-18%, vehicle finance 10-15%, home loans around prime (11.75%). The exact rate depends on your credit profile, the lender, and whether the rate is fixed or variable. Check your latest statement or banking app for the actual rate on each account.

What if my minimum payment does not cover the interest?

If your minimum payment is less than the monthly interest charge, the debt grows every month even while you are paying. This is called negative amortisation and it is a red flag. The calculator will warn you if this happens. In that case, you should contact the lender to negotiate a higher structured payment, or seek free debt counselling through the National Credit Regulator (NCR).

Can I switch strategies part-way through?

Absolutely. Some people start with snowball to get early wins and build momentum, then switch to avalanche once the small debts are gone and they are locked in to the habit. The calculator shows both strategies from today, but you can re-run it at any point with your updated balances.

How does this calculator handle debts that are already being paid down?

Enter the current outstanding balance (not the original loan amount) and the current minimum payment. The calculator simulates forward from today. If you have already paid off some debts, simply leave them out.

Does this replace a financial adviser?

No. This is a guideline tool, not advice. Your specific situation — risk tolerance, other goals, family obligations, tax implications — may shift the right approach. A FAIS-licensed financial adviser or registered debt counsellor can build a holistic plan. This calculator is a starting point for that conversation.

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