📉 Debt Payoff Calculator
Enter your debts and any extra you can put towards them each month. The calculator runs both the snowball and the avalanche method and shows which clears first and which costs less.
Your debts
Snowball or avalanche: which clears debt faster, and which you will actually finish
With more than one debt, the minimums are fixed and the only real decision is where the extra money goes. Two strategies dominate the advice: snowball targets the smallest balance first, avalanche targets the highest interest rate. Both pay the minimum on everything else and roll each cleared payment into the next debt, which is what makes either one work.
How they differ
| Snowball | Avalanche | |
|---|---|---|
| Target order | Smallest balance first | Highest interest rate first |
| Mathematically optimal | No | Yes |
| First win arrives | Soonest | Can take a long time |
| Typical interest saved | Baseline | Usually 1–10% less interest |
| Completion rate in studies | Higher | Lower |
Avalanche always wins on arithmetic, because it attacks the most expensive money first. Snowball often wins in practice, because clearing an account entirely produces a visible result early, and behavioural research consistently finds that people who get an early win are more likely to finish. The best strategy is the one you complete.
Why the gap is usually smaller than people expect
The difference between the two methods depends on how correlated balance size is with interest rate. If your smallest debt also carries the highest rate, both methods pick the same target and the difference is zero. The spread only becomes large when a big balance sits at a much higher rate than a small one.
If avalanche saves you less than about $200 over the whole plan, take the snowball. A few hundred dollars is a poor trade against a materially higher chance of actually finishing.
The rolling payment is the engine
Both methods depend on one habit: when a debt clears, its payment does not go back into your spending. It gets added to the attack on the next debt. That is why the plan accelerates. Three debts with minimums of $105, $215 and $35 plus $200 extra means $555 a month going out. When the $35 store card clears, the attack money becomes $235, then $340 when the card goes, and so on.
Before you start
- List everything. Balance, rate and minimum for every debt, including family loans and buy-now-pay-later. Plans fail on the debt that was forgotten.
- Build a small buffer first. Around one month of essential expenses, so the next surprise does not go onto a card you have just cleared.
- Call and ask for a lower rate. It takes ten minutes and works more often than people expect, especially with a good payment history.
- Stop adding to the balances. No strategy outpaces continued borrowing.
What about consolidation?
A consolidation loan replaces several debts with one at a lower rate, which genuinely helps if the rate is lower and the term is not much longer. It fails when the term stretches so far that the total interest rises despite the lower rate, or when the cleared cards are used again. Run both scenarios before committing, and treat the consolidation loan as the last debt you will ever take.
A worked example
Three debts: a $4,200 card at 22.9% with a $105 minimum, a $9,800 car loan at 7.4% with $215, and a $1,150 store card at 27.5% with $35. With $200 extra a month, both methods finish in about 33 months. Snowball clears the store card in month 4 and the credit card in month 17; avalanche clears the store card first too, because it has both the smallest balance and the highest rate, so here the two plans are nearly identical. Change the store card to $6,000 and the gap opens to several hundred dollars in favour of avalanche.
Frequently Asked Questions (FAQs)
Which is better, snowball or avalanche?
Avalanche always costs less in interest. Snowball has a higher completion rate in behavioural studies because the early win sustains motivation. Run both in the calculator: if the saving from avalanche is small, choose the one you are more likely to finish.
Should I pay off the smallest debt or the highest interest rate first?
Highest rate if the saving is meaningful and you are confident of sticking with it. Smallest balance if you have struggled to maintain a plan before, or if the first avalanche target would take more than a year to clear.
What is the rolling or stacking method?
When a debt is cleared, its payment is added to the attack on the next one instead of being absorbed back into spending. Both strategies rely on it. Without rolling, the plan runs at a constant speed instead of accelerating.
Should I include my mortgage?
Usually not in the same plan. Mortgage rates are far below consumer debt rates, the term is much longer, and the interest may be tax deductible. Clear the expensive consumer debt first, then decide separately whether to overpay the mortgage or invest.
Does this hurt my credit score?
Paying down balances normally improves it, because credit utilisation falls. Closing accounts afterwards can reduce your score by cutting available credit, so consider keeping cleared cards open with no balance.
What if I cannot cover the minimum payments?
That is a different problem and a calculator will not solve it. Contact the lenders before missing a payment; most have hardship programmes. In many countries free debt advice charities negotiate on your behalf, and they are considerably better than commercial debt settlement firms.