Ballasted tracks are common in the railway system as a means of providing the necessary support for the sleepers and the rails. To keep them operational, tamping and other maintenance actions are performed based on track geometry measurements. Ballast particle rearrangement, which is caused by train load, is one of the most important factors leading to track degradation. As a result, when planning maintenance, it is vital to predict the behaviour of the ballast under cyclic loading. Since ballast is a granular matter with a nonlinear and discontinuous mechanical behaviour, the discrete element method (DEM) was used in this paper to model the ballast particle rearrangement under cyclic loading. We studied the performance of linear and nonlinear models in simulating the settlement of the sleeper, the lateral deformation of the ballast shoulder and the porosity changes under the sleeper. The models were evaluated based on their ability to mimic the ballast degradation pattern in vertical and lateral direction. The linear contact model and the hysteretic contact model were used in the simulations, and the effect of the friction coefficient and different damping models on the simulations was assessed. An outcome of this study was that a nonlinear model was proposed in which both the linear and the hysteretic contact models are combined. The simulation of the sleeper settlement and the changes in the porosity under the sleeper improved in the proposed nonlinear model, while the computation time required for the proposed model decreased compared to that required for the linear model.