Debt Payoff Calculator

Snowball vs avalanche

There are two well-known debt-payoff strategies, and they answer the same question — "which debt should I attack first?" — in different ways.

• Avalanche: pay the highest-APR debt first. Mathematically optimal — you pay the least total interest. The only thing it doesn't optimize for is your motivation while doing it.
• Snowball: pay the smallest-balance debt first. You'll see the first debt disappear sooner, which is psychologically powerful — but you'll usually pay slightly more interest along the way.

Both methods use the same monthly cash budget. The mechanics are identical: pay all minimums, then throw any extra at one "focus" debt. The only difference is how you pick the focus.

How the simulation works

The calculator runs a month-by-month simulation:

1. Accrue interest. Each debt's balance grows by APR ÷ 12 each month.
2. Pay minimums. Every active debt gets its minimum payment.
3. Throw extra at focus. Whatever's left of your monthly pool (minimums + extra payment) goes entirely to the chosen focus debt.
4. Roll over. When a debt is paid off, its minimum doesn't disappear — it joins the extra-payment pool, attacking the next focus debt. This is the "snowball effect," and it works under either method.
5. Repeat until balances are zero (or 50 years pass — the calculator gives up at that point).

The model assumes APRs and minimum payments stay constant. Real credit-card minimums adjust as balances drop; we ignore that for simplicity.

The right method isn't the one that's mathematically optimal. It's the one you'll actually stick to.

Which method should you pick?

Honest answer: pick whichever you'll actually finish. The difference between methods is usually 5–15% of total interest and a few months — meaningful, but not life-changing. The difference between "stuck with it for 30 months" and "gave up after six" is enormous.

Use the calculator above to see your specific numbers, then:

• Pick avalanche if you respond well to math and the savings are large enough to motivate you.
• Pick snowball if you've struggled to maintain debt-payoff discipline before, or if your smallest debt is small enough that clearing it feels like a real milestone (a $500 medical bill, an $800 store card).
• Mix the two: pay your smallest debt off first as a quick win, then switch to avalanche on the remaining ones.

How to accelerate payoff

1. Lower the APR before lowering the balance. A 22% credit card balance-transferred to 0% for 18 months is the fastest single move you can make. The math on the calculator above changes dramatically when you swap a 22% APR for 6%.
2. Consolidate strategically. A personal loan at 8% replacing 22% credit-card debt is a winning trade only if you don't run the cards back up. The data suggests most people do, so consolidation works only with a hard rule against new card balances.
3. Direct extras to focus, not all debts. The biggest mistake people make is paying a little extra on every debt. Send the entire extra to one focus debt — the snowball effect is what crushes the timeline.
4. Find $50–200/mo extra. Cancel a streaming service, eat out one fewer time, take a side gig for a quarter. The calculator shows: even $100/mo extra usually shaves 6–18 months off a typical debt load.
5. Don't drop the emergency fund to zero. Without a small cushion, the next car repair becomes credit card debt — undoing months of progress. Keep one month of expenses aside, then attack debt.

What this calculator doesn't model

• Variable minimum payments. Real credit-card minimums are roughly 1–2% of balance. As you pay down, the minimum drops, which means the calculator slightly underestimates how long things take if you only pay minimums. Set the minimum to a value that's stable for your expected payoff path.
• APR changes. Promotional rates expire, variable rates move with the Fed. The model assumes APRs stay constant.
• New debt during payoff. If you keep using a credit card while paying it off, this model isn't accurate. Stop using the card.
• Fees and prepayment penalties. Some loans charge early-payoff penalties; some cards charge annual fees. None of those are in the model.
• Tax effects. Mortgage interest may be deductible, student-loan interest sometimes is. The model uses pre-tax numbers — fine for most decisions, slightly off for very large balances.