Snowball or Avalanche - Opinions please

rigare11a

Hi All,

 I am just at the start of making my debt free plan and I am considering which approach to take, I would be interested to hear opinions or experiences you may have had. 

I have included a breakdown picture : 

Snowball
Avalanche


Thanks in advance

bargainbetty

Overdrafts can be called in, but the interest rate on SB (I don't know what that stands for) is excruciating. Perhaps look a third option of overdraft, then SB then PP?

rigare11a

Thanks I will take a look at the numbers on that option. SB is SimplyBe online clothing place the interest rate is terrible I know 

twadds123

unless my maths has failed me then

snowball = £2962.88

Avalance = £2891.26

so avalance is £71.62 better, this obviously assumes your figures are correct and as other poster said that their is no real risk of overdraft being withdrawn, and obviously no other spending.

however it might also depend on your outlook and motivation. The snowball whilst overall slightly more expensive does give quicker "wins" i.e completion of a debt and i've found that useful in keeping motivation, whilst the avalance doesn't give you a win for a good bit longer.

donemedosh

I would tackle the dept that is charging the most interest first (paying as much as possible) as fast as I could then the next highest and so on. Most of us know how very hard it is to become debt free good luck

FluffyBabyPenguin

What if you paid off the MB first (so you can celebrate paying one off quickly), then put the money towards that high-interest one, SB, then finally the much lower interest PP? Kind of a mix of both approaches. Otherwise I think avalanche looks better because that high interest debt (IMHO) worth tackling sooner rather than later.

Sea_Shell

Are the payments against the MB and PP debts the minimum allowable at £20 and £50?    They seem high for a £500 and £600 debt.

If not, try re-working the figures using just the minimum, and throwing even more money at the high interest SP.

I'm assuming £300 is the total amount you can afford to throw at the debt, or that just as an illustration?    Can you squeeze any more out of your budget to throw at it.


*My vote is for Avalanche, by the way - it's both the biggest debt, with the highest interest rate*

Sea_Shell

Also having just read your diary thread, is there a particular reason you've not included the Likely Loans £2465 in your calculations?

What's the interest on that one?

rigare11a

Thanks everyone for replies and some things to think about I’m slightly leaning toward the hybrid of getting a quick win and then paying off the highest interest rate. I have also managed to get a lower rate on the SB by setting up a DD for the min payment each month, I will just make some top up payments after. 

@Sea_Shell I had not included likely loans because there is no benefit for me paying it off earlier it was set repayments per month when I set it up so I have not included on my plan here. The final payment for that loan will be in May 22 and is being taken directly out my bank day after payday. I feel the others are the ones that are a bit out of my control/not very organised. 

£300 is what I have budgeted for now but I am going to see how this month goes as I might be able to do more. The MB and PP are a little over the min payment I have rounded up a little. 

Again thanks everyone for your help!

Sea_Shell

You seem to have a very positive attitude, which is great to read.

Good luck.

rigare11a

Ok so after getting some new rates from SB and validating the min payment amount I have recalculated below also chucking an extra £10 pm at the payments. I will need to pay a bit more than minimum on PayPal else it will go over the arranged limit. But I think I am going for the avalanche 

Thanks for all your inputs