Finanzen
Debt Payoff Calculator
Compare the avalanche and snowball methods to pay off debt faster
FAQ
What is the debt avalanche method?
The avalanche method puts every extra dollar toward the debt with the highest interest rate (APR) first. It minimizes the total interest you pay and usually clears your debt fastest.
What is the debt snowball method?
The snowball method targets the smallest balance first, regardless of interest rate. Clearing a debt quickly provides a psychological win that helps many people stay motivated.
Which method should I choose?
Avalanche saves the most money mathematically. Snowball can be better if you value quick wins and motivation. This calculator lets you compare both side by side.
What happens when one debt is paid off?
Its monthly payment is rolled into the payment for the next target debt. This "rollover" is what accelerates payoff over time under both methods.
How to Use the Debt Payoff Calculator
Enter your debts and an extra monthly payment to see how quickly you can become debt-free and how much interest you'll pay using the avalanche or snowball method.
- Add each debt with its balance, interest rate (APR), and minimum monthly payment.
- Enter any extra amount you can pay each month on top of the minimums.
- Choose a strategy: Avalanche (highest APR first) or Snowball (lowest balance first).
- Review your debt-free date, total interest, and the order debts get paid off.
- Switch strategies to compare total interest and time side by side.
How Debt Payoff Is Calculated
The calculator simulates your debts month by month. Each month interest accrues, minimum payments are applied, and any extra payment targets one debt until it's gone.
Monthly Interest
Interest is added to each balance every month before payments are applied.
Example:
Input: Balance = $5,000, APR = 22%
Calculation: 5,000 × (0.22 / 12)
Result: $91.67 interest that month
Avalanche Target
Directing extra payments to the highest-rate debt minimizes the total interest you pay across all debts.
Example:
Input: 22% card vs. 6% car loan
Calculation: Extra goes to the 22% card
Result: Lowest total interest
Snowball Target & Rollover
When a debt is cleared, its old minimum payment is added to the extra pool for the next target — accelerating payoff under either method.
Example:
Input: $500 debt cleared, $50 minimum freed
Calculation: $50 added to the next debt's payment
Result: Faster subsequent payoff
Real-World Use Cases
A payoff plan turns a pile of debts into a clear, motivating timeline.
Credit Card Debt
See how much faster you escape high-interest card debt by adding even a small extra payment.
Example: Adding $200/month can cut years off multiple credit card balances
Avalanche vs. Snowball
Compare the lowest-cost method against the fastest-motivation method to pick what fits you.
Example: Avalanche saves the most interest; snowball delivers quicker wins
Budgeting a Windfall
Test how a raise, bonus, or freed-up expense accelerates your debt-free date.
Example: Apply a $3,000 bonus as a one-time boost to your highest-APR debt
Tips & Common Mistakes
Tips
- Always pay at least the minimum on every debt to avoid late fees and credit damage.
- Avalanche is mathematically cheapest; snowball can be best if motivation is your bottleneck.
- Re-run the plan whenever your income or balances change.
Common Mistakes to Avoid
- Setting a minimum payment that doesn't even cover monthly interest — the balance will never fall.
- Adding new debt while paying off old debt, which resets your progress.
- Ignoring the psychological side: the 'best' plan is the one you'll actually stick to.