How to use the debt payoff calculator
- List your debts, up to six: a name, the balance, the APR and the minimum monthly payment for each. Leave unused rows blank.
- Enter an extra monthly payment you can add on top of all the minimums, or 0 to use only the minimums.
- Compare the snowball (smallest balance first) and avalanche (highest APR first) results: time to debt-free, total interest and payoff order.
- Download the CSV to see the remaining balance month by month for both plans.
Formula
Each month, for every open debt: interest = balance x APR / 12 (rounded to the cent), added to the balance
Pay each debt's minimum (or the remaining balance, if smaller)
Send the rest of the budget (minimums + extra - minimums already paid) to the target debt
Snowball target: smallest starting balance. Avalanche target: highest APR
When a debt is cleared, its minimum rolls over, so the monthly total stays constant
The simulation runs month by month for up to 1,200 months. A minimum that does not cover its own first month of interest is rejected, because that balance would never go down.
Worked example: three debts and $300 extra
A credit card of $8,000 at 24.99% with a $240 minimum, a personal loan of $1,500 at 9.5% with a $60 minimum and a car loan of $12,000 at 6.5% with a $280 minimum. Minimums total $580, and the extra $300 makes the monthly budget $880.
Snowball attacks the personal loan first and is debt-free in 29 months with $3,321.85 in interest. The payoff order is the personal loan (month 5), the credit card (month 20) and the car loan (month 29).
Avalanche attacks the credit card first and is debt-free in 28 months with $3,059.04 in interest, which saves $262.81 and one month. The order is the credit card (month 18), the personal loan (month 19) and the car loan (month 28). Paying only the minimums, with no extra and no rollover, would take 58 months and cost $7,665.42 in interest.
Snowball versus avalanche
The avalanche method puts extra money toward the highest interest rate first, so it usually costs less interest than the snowball and never needs more of the same budget. The snowball clears the smallest balance first, which closes accounts sooner and gives quick wins. Some people stay with a plan longer when they see progress early. The difference in cost is often small compared with the benefit of simply paying more every month, so the best plan is the one you will follow.
The power of rolling payments over
When one debt is paid off, its minimum is not spent elsewhere. It is added to the next target. This is why the plans speed up as they go. Even without an extra payment, rollover alone cuts the example above from 58 months to 50 months, and interest from $7,665.42 to $7,181.53. In this particular example, the snowball and avalanche totals are identical when the extra payment is 0. The order matters most when it changes which debt keeps carrying interest the longest.
Related tools
To look at one card in detail, use the credit card payoff calculator, which also shows the payment needed to finish by a target date. For a single installment loan with extra payments, use the loan calculator.
Assumptions and limits
- Interest is added monthly at APR / 12 on each balance and rounded to the cent. Interest on real cards may be calculated daily.
- The budget (all minimums plus the extra payment) is constant until every debt is paid. Minimums are fixed amounts and do not shrink as balances fall.
- No new charges, fees, promotional rates or rate changes are modeled. Late fees and penalties are not included.
- Snowball orders debts by starting balance and avalanche by APR (ties go to the smaller balance). The order is fixed at the start.
- A minimum that does not exceed the first month's interest is treated as an error, and plans longer than 100 years are rejected.
- This is an estimate for planning, not financial advice.
Frequently asked questions
What is the debt snowball method?
You pay the minimum on every debt, then send all extra money to the smallest balance. When it is paid off, you add its payment to the next smallest balance and repeat until every debt is gone.
What is the debt avalanche method?
It works the same way but targets the highest interest rate first. Because that debt is the most expensive, this approach minimizes total interest, although it may take longer to clear the first account.
Why do both methods sometimes give the same result?
If the smallest balance also has the highest rate, both methods choose the same target and the results match. They can also match when the order in which debts are cleared turns out to be the same.
Why am I told my minimum payment is too low?
If a minimum is less than or equal to one month of interest on the balance, the balance would stay the same or grow. Check the APR and the minimum, or contact your lender for the correct figures.
Can I include a mortgage?
You can, but it will dominate the plan because of its size and long term. Most people leave it out and focus on credit cards, personal loans, student loans and vehicle loans. Use the mortgage calculator for the home loan.