Two debts, one salary, and whatever is left after rent and groceries. That is the entire setup. The question people search is which debt to attack first, and the internet answers with two names, snowball and avalanche, without ever putting dirham amounts next to either one.
So I put dirham amounts next to both.
What the debt snowball and the debt avalanche actually do
Both methods assume the same discipline: a fixed amount goes toward debt every month, and it does not shrink as balances shrink. Minimum payments go to everything, and the surplus goes to exactly one target debt.
The avalanche aims that surplus at the highest interest rate. It is the mathematically cheapest order, with no exceptions.
The snowball aims it at the smallest balance. It clears one debt early, which removes a payment obligation and produces a visible win.
The two only disagree when the smallest balance is not the most expensive one. When the largest debt is also the priciest, both methods give the same instruction and the whole argument evaporates.
A worked two-debt example in AED
Here is a case where they genuinely diverge. Balances at month zero:
- Credit card: AED 26,000 at 3% a month, minimum payment 5% of the outstanding balance
- Car loan: AED 9,000 remaining, roughly 0.5% a month on a reducing balance, fixed installment AED 800
Total committed: AED 3,500 a month, identical in both plans.
Avalanche (card first): AED 800 to the car, AED 2,700 to the card. Everything clears in month 12. Total paid AED 40,438, of which AED 5,438 is interest.
Snowball (car first): the card takes only its 5% minimum, about AED 1,300 in month one, and the remaining AED 1,400 goes to the car on top of its installment. The car is gone in month 5. Everything clears in month 12. Total paid AED 41,443, of which AED 6,443 is interest.
The avalanche saved AED 1,005. Both plans finished in the same month.
That is worth sitting with. On a AED 35,000 problem run over a year, the theoretically optimal order bought about a thousand dirhams and no extra time at all. Raising the monthly commitment from AED 3,500 to AED 4,000 does more: the avalanche then finishes in month 10 with AED 4,535 of interest, saving AED 903 against its own slower version. An extra AED 500 a month is worth roughly as much as picking the correct method. The amount is the lever. The order is an adjustment on top of it.
Why the avalanche is harder to run correctly in the UAE than it looks
The avalanche depends entirely on ranking debts by rate, and UAE lenders do not quote rates on a comparable basis.
Credit cards quote a monthly rate. Emirates NBD’s published card price guide lists finance charges at 3.25% per month. Car loans and personal loans are usually advertised as a flat annual rate, calculated on the original amount for the full term rather than on the balance still outstanding. A four-year loan advertised at 4% flat sits somewhere near 7.5% once converted to a reducing-balance basis, and the reducing figure is the only one that can be compared to a card.
Put both in the same units and the ranking is obvious: a card at 3% a month is 36% a year nominal, against something under 8% for the loan. It is the conversion, not the arithmetic, that people get wrong, and getting it wrong reverses the avalanche’s entire instruction.
At the trading company where I work, the finance team ages receivables the same way. Everything lands in one table, in one currency, on one basis, before anyone decides who to chase. Nobody argues about which invoice to chase first while half the amounts are still in the wrong units.
When the snowball is the better choice
The snowball’s cost here is measurable at AED 1,005. Its benefit is that clearing the car in month 5 permanently removes an AED 800 obligation from the monthly floor.
That is not only a motivational point. The Central Bank of the UAE caps total loan repayments at 50% of gross salary and regular income, limits personal loans to 20 times salary, and sets a 48-month maximum repayment period (Regulation No. 29/2011). Those caps exist because residence here is tied to employment, and a lower fixed monthly obligation is what survives a gap in income. A plan that ends one commitment in month 5 is more resilient than a plan that ends both in month 12, even though it costs more.
So the honest answer is that the avalanche wins on paper by an amount most people would not feel, and the snowball wins whenever it is the plan that actually gets finished. Both beat the third option, which is paying minimums and calling it progress.
Run the numbers on the real balances rather than trusting either name. Two debts, a monthly rate for each on the same basis, and a fixed monthly total is all the model needs; the debts screen in Masrofna does the same arithmetic, but a spreadsheet with four rows does it fine. The number that changes the outcome is the one at the bottom of the budget, not the order of the rows above it.