Debt Payoff Calculator
Snowball vs avalanche — see which payoff strategy gets you out faster.
Result
- Snowball — pays off in54 months (4.5 yrs)
- Snowball — total interest$6,566.87
- Avalanche — pays off in54 months (4.5 yrs)
- Avalanche — total interest$6,566.87
- Total balances$25,500.00
- Monthly budget$600.00
How to use this calculator
- Enter each debt's current balance and APR.
- Set the total amount you can put toward all debts each month.
- Compare the two strategies and pick the one that fits your psychology.
- For more debts, group small ones together as one entry.
About this tool
Two proven debt-payoff methods, side by side. The Snowball method targets your smallest balance first (regardless of interest rate) — quick wins, big motivation. The Avalanche method targets the highest APR first — mathematically optimal, saves the most interest. Enter up to ten debts and your total monthly payment budget; the calculator simulates both strategies month by month and tells you which one frees you faster and how much interest you save by going avalanche. If your budget is below the combined minimums, you'll see "budget too low" — increase it or list fewer debts.
How it works — the formula
Each month, for each debt:
interest_t = balance · APR/12
principal_t = payment_t − interest_t
Avalanche order: highest APR first. Snowball order: smallest balance first.Both methods make the minimum payment on every debt and direct any extra dollars to a single "focus" debt until it is cleared, then roll its previous payment onto the next. Avalanche minimizes total interest paid (Brigham, Fundamentals of Financial Management). Snowball, popularized by Dave Ramsey and validated by behavioral research from the Kellogg School of Management (Gal & McShane 2012), produces faster early wins that improve adherence.
Worked examples
- Inputs:
- Card A $5k @ 22%, Card B $3k @ 18%, Card C $2k @ 12%; total $300/mo budget
- Output:
- Avalanche order A→B→C clears all in ~38 months; total interest ≈ $2,400
- Inputs:
- Same balances and budget
- Output:
- Snowball order C→B→A clears all in ~40 months; total interest ≈ $2,650; first debt cleared after ~7 months
- Inputs:
- $300/mo → $500/mo budget, avalanche
- Output:
- All cleared in ~22 months; total interest ≈ $1,260 (vs $2,400)
Limitations
- Assumes new charges stop — adding fresh balances during payoff makes the simulation invalid.
- Variable-rate debts (most credit cards) can re-price upward during payoff in response to FRB rate changes.
- Tax-deductible interest (some student loans, mortgages) can lower the effective rate and change the avalanche order.
- Behavioral adherence often beats math — pick the method you will actually stick with.
Debt-payoff plans depend on stable income and stopping new borrowing. This calculator does not provide financial or credit-counseling advice — free help is available from NFCC-affiliated nonprofit counselors.
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