Maya's avalanche saves $174.36, and both plans end in month 21
Maya owes $15,000 and can put $800 a month toward it. A previous version of this case study claimed the avalanche saved $1,420 and finished four months earlier. Those results were inconsistent with its own balances and interest rates. Recalculating the stated debts gives $1,510.61 interest for the snowball and $1,336.25 for the avalanche. Both clear in month 21.
| Account | Balance | APR | Monthly minimum |
|---|---|---|---|
| Medical bill | $1,200 | 4% | $50 |
| Car loan | $7,800 | 6% | $180 |
| Credit card | $6,000 | 22% | $150 |
The starting minimums are $380, leaving $420 of the $800 budget for the target account. The example assumes each balance accrues APR / 12 once at the start of a month; minimums are paid next; the remaining budget goes to the priority debt, with any excess immediately passed to the next debt. Interest is calculated without intermediate cent-rounding. A real statement may use daily accrual, fees or different minimums.
The account order changes the interest bill
The snowball targets the $1,200 medical bill, then the $6,000 card, then the $7,800 car loan. It pays the medical bill in month 3 and the card in month 14. Interest by account is $7.33 medical, $580.96 car and $922.32 card: $1,510.61 total.
The avalanche targets the 22% card, then the 6% car loan, then the 4% medical bill. It clears the card in month 12. Interest by account is $51.11 medical, $557.20 car and $727.94 card: $1,336.25 total. The card alone saves $194.38; the medical bill costs $43.78 more because it waits. The smaller changes on the car loan bring the net saving to $174.36.
Maya’s interest paid by repayment order
Notice the first month's card interest: $6,000 × 22% / 12 = $110. Any full-payoff calculation claiming only $85 of card interest is impossible even before the later months are considered.
A few checkpoints make the example auditable
The table shows the balance left after the month's interest and $800 payment. A zero means the account has closed, and the final payment is smaller than $800 because no debt remains.
| Month-end | Snowball: total balance | Avalanche: total balance |
|---|---|---|
| 3 | $13,050.00 | $13,030.97 |
| 12 | $6,736.70 | $6,586.40 |
| 18 | $2,091.11 | $1,920.82 |
| 21 | $0 | $0 |
Maya’s remaining balances at four checkpoints
In month 1, the snowball sends $470 to the medical bill and leaves it at $734 after $4 interest. The avalanche sends $570 to the card and leaves it at $5,540 after $110 interest. You can reproduce every later month by applying the same interest, minimum and rollover rules. The last payment is $510.61 under the snowball and $336.25 under the avalanche.
There is a useful cross-check that does not require a repayment calculator. Total principal is $15,000. With no fees, all payments together must equal principal plus total interest. The snowball therefore pays $16,510.61 in all: twenty $800 payments and a $510.61 final payment. The avalanche pays $16,336.25: twenty $800 payments and a $336.25 final payment. These amounts reconcile to the interest figures above. The old claimed $560 avalanche interest would imply $15,560 paid in all, which conflicts with the 22% card's accrual and the described schedule.
The interest split also explains why the headline savings are smaller than the card-only difference. The snowball gives the 4% bill only $7.33 of lifetime interest, but the card costs $922.32. The avalanche trims card interest to $727.94 while leaving the medical bill active long enough to cost $51.11. You need all three account totals to know the net result.
Why the smaller saving still matters
Maya gets her first account closed nine months earlier with the snowball: month 3 instead of month 12. That is a real planning benefit if it helps her keep the $800 habit. The avalanche is cheaper under these assumptions, but it does not pull the debt-free month forward. It lowers the final month's bill.
If Maya cannot make a required minimum, neither schedule applies. She should speak to the creditor about hardship terms before the due date. If she considers a consolidation loan, she needs the new APR, fees and full term; a lower monthly payment alone does not establish a lower total cost. The FTC's debt guidance explains the risks in debt settlement and other offers.
This case is a model, not Maya's real loan contract. The useful question for your accounts is whether the first closed balance is worth the extra interest shown by a complete, reproducible schedule.
To recreate the ledger for yourself, write down the statement balance, APR and current minimum for each account on the same date. Calculate the next month's interest using the issuer's actual method, pay the minimum on each, and use one consistent extra-payment budget. If a minimum falls as the balance declines, decide whether you will keep the freed cash in the plan. Re-run the schedule when a rate changes or a new charge appears. A projection that never records those events can be arithmetically neat and still be useless for a real borrower.
Maya's medical bill is modeled at 4% APR because that is the original case input. Some medical bills have no interest or a negotiated payment plan; others can enter collections. Replacing the 4% with 0% or changing the $50 minimum would change both the interest and the first-win dates. The disclosed ledger is a demonstration of a method, not a recommendation to postpone any particular real medical payment.
