Debt Payoff Planner

Two well-known debt payoff methods produce very different psychological experiences and slightly different financial outcomes. Snowball prioritizes the smallest balance first for early wins; avalanche prioritizes the highest interest rate for maximum interest savings.

Snowball vs avalanche

Both methods pay minimums on every debt. Snowball directs every extra dollar to the smallest balance until paid off, then rolls that payment into the next smallest. Avalanche directs every extra dollar to the highest interest rate first. Avalanche always saves more money in absolute terms; snowball produces faster visible wins, which research suggests improves follow-through.

When to use this calculator

Use it any time you have multiple debts. Plug in each balance, rate, and minimum payment, then choose your strategy. Run both side-by-side to see the actual dollar difference — for many people it's a few hundred to a few thousand dollars. If that gap is small relative to your total debt, snowball's behavioral advantage often wins; if the gap is large, avalanche's math wins.

Worked example

Three debts: $1,000 at 22%, $5,000 at 18%, and $10,000 at 12%. With $500/month total payment, snowball clears the smallest first (in 3 months), creating an immediate sense of progress. Avalanche tackles the 22% card first too, saving the most on interest. In this case they happen to converge — when the highest rate also has a small balance, both methods agree.

Limits and assumptions

Each month the calculator pays every debt's minimum, then puts the extra monthly amount you enter toward one target debt: the smallest balance (snowball) or the highest rate (avalanche). When a debt is cleared, its minimum is added to the extra amount, which is the snowball effect. Interest is added monthly at the annual rate ÷ 12, and the schedule runs until every balance is zero or 360 months (30 years) have passed, whichever comes first.

Rates and minimums are held constant, new charges are not modelled, and promotional 0% periods or balance-transfer fees are not supported. The schedule assumes the extra amount is paid every single month.

Frequently asked questions