Debt Payoff Methods UK: Snowball, Avalanche, Hybrid & Cash Flow Index
If you've got an overdraft, a couple of cards, and maybe a loan, you've probably heard people argue about Snowball vs Avalanche.
But there are actually 5 main strategies — plus the option to set your own custom order. This guide explains each one in plain English, when it works best, and how to test them on your actual numbers.
This is information only, not regulated debt advice. If you can't cover essentials or minimum payments, speak to a free UK debt charity like StepChange or National Debtline, before using any calculator.
Before You Pick a Strategy: Three Things That Matter More
Whatever strategy you choose, these come first:
1. Essentials Rent, council tax, utilities, food, transport, childcare. If you can't cover these, a payoff strategy isn't your first step — help from a debt charity is.
2. Minimum Payments Every strategy assumes you're covering minimums on all debts. If your minimums exceed your budget, the strategy debate is irrelevant until that's solved.
3. A Realistic Debt Budget What's left after essentials and a small buffer is your debt budget. The DebtRiot calculator works this out automatically, but you can adjust it. Be honest — a smaller realistic number beats a fantasy number you can't sustain.
Once those are in place, strategy genuinely matters. Here are your options:
Strategy 1: Snowball (Smallest Balance First)
How it works: After paying minimums on everything, all extra money goes to the debt with the smallest balance. When that's cleared, you roll its payment onto the next smallest, and so on.
Best for:
People who've tried to pay off debt before and lost motivation
Anyone with lots of small, annoying balances creating mental clutter
Situations where quick wins matter more than pure maths
Trade-off: You'll usually pay more interest overall than Avalanche because you're ignoring interest rates. But if Avalanche makes you quit after 3 months, Snowball wins.
Example order:
Store card — £350
Overdraft — £750
Credit card — £2,100
Car finance — £6,500
Strategy 2: Avalanche (Highest Interest Rate First)
How it works: After minimums, all extra money goes to the debt with the highest interest rate (APR or EAR). When that's cleared, you move to the next highest rate.
Best for:
People who want to pay the least interest overall
Situations where one or two debts are clearly more expensive than the rest
Anyone comfortable with delayed gratification
Trade-off: If your most expensive debt is also your largest, you might go months without clearing anything. That can kill motivation.
Example order:
Overdraft — 39.9% EAR
Credit card — 23.9% APR
Store card — 21.9% APR
Car finance — 9.9% APR
Strategy 3: Hybrid S→A (Snowball Start, Avalanche Finish)
How it works: Start with Snowball to clear a few small debts for quick wins. After a set number of debts are gone (default: 2), switch to Avalanche for the rest.
Best for:
People who want motivation AND interest savings
Anyone with a mix of small annoying debts plus one or two expensive ones
The "best of both worlds" crowd
Trade-off: Slightly more complex — you're tuning two things (starting method + switch point). But DebtRiot handles this automatically.
Example:
Clear 2 smallest debts first (quick wins)
Then target highest interest rates for the remainder
Strategy 4: Hybrid A→S (Avalanche Start, Snowball Finish)
How it works: Start with Avalanche to knock out the most expensive debt first. After a set number of debts are cleared, switch to Snowball for momentum.
Best for:
When your highest-rate debt is also relatively small (so you can clear it quickly)
People who want to "do the hard thing first" then coast
Trade-off: Less common than S→A, but useful in specific situations.
Strategy 5: Cash Flow Index (Free Up Monthly Budget Fastest)
How it works: Calculate each debt's CFI: Balance ÷ Minimum Payment. Target the lowest CFI first — these debts free up the most monthly cash flow relative to their size.
Best for:
When you're stressed about monthly cash flow
Situations where freeing up £50/month quickly matters more than total interest
Anyone who needs breathing room before optimising
Trade-off: Doesn't minimise total interest like Avalanche. But if tight cash flow is making you miss payments, fixing that comes first.
Example calculation:
Cash Flow Index (CFI) – which debt frees up cash fastest?
Lower CFI = more cash flow unlocked for every £1 you pay off.
| Debt | Balance | Minimum | CFI (Balance ÷ Min) |
|---|---|---|---|
| Store card Pay first | £350 | £25 | 14 |
| Overdraft | £750 | £50 | 15 |
| Credit card | £2,100 | £63 | 33 |
| Car finance | £6,500 | £180 | 36 |
| In this example, clearing the store card first gives the biggest cash-flow boost per pound repaid. | |||
Bonus: Custom Order (You Decide)
Not a comparison strategy, but an option: drag and drop your debts into any order you want.
Use it when:
You want to clear a joint debt for relationship reasons
An overdraft is close to its limit and causing daily stress
You owe family money and want peace of mind
A 0% promo is ending soon and you want to prioritise it
Custom order still covers minimums first, then sends extra money down your list.
So Which Strategy Is "Best"?
There's no universal answer. But here's a quick guide:
Not sure where to start? Pick a method by goal:
Each option uses the same debt budget – only the payoff order changes.
| If you want… | Try… |
|---|---|
| Least total interest over the journey | Avalanche APR/EAR first |
| Quick wins and motivation early on | Snowball smallest first |
| Both motivation and interest savings | Hybrid S → A |
| More monthly breathing room as you clear debts | Cash Flow Index CFI |
| Full control over the exact payoff order | Custom Order you choose |
The real answer: test them on your numbers and see which one you can actually stick with.
How to Compare All 5 Strategies on Your Numbers
Go to the DebtRiot calculator
Enter your income, essentials, and debts
Click Compare Strategies
See months-to-debt-free, total interest, and milestones for each
Pick the one that fits your situation
When you're ready, you can turn your chosen strategy into a complete PDF plan with payment schedule and calendar (one-time £9.99).
