Debt Payoff Calculator

Snowball vs avalanche: what's the difference?

Both methods follow the same core plan: pay the minimum on every debt, then send every spare dollar at one target debt until it is gone. When a debt is paid off, its minimum payment "rolls" into the next target, so your total monthly budget never changes — it just concentrates on fewer and fewer debts. The only difference is the order:

• Snowball: attack the smallest balance first. You knock out whole debts quickly, which builds momentum and simplifies your bills.
• Avalanche: attack the highest APR first. Every extra dollar goes where it stops the most interest, so this order is mathematically the cheapest.

This calculator simulates both plans month by month. Each month it adds one-twelfth of the APR in interest to every open balance, pays each debt its minimum, and puts everything left over toward the target debt for that strategy.

A worked example

Suppose you have three debts: $1,500 at 7% APR with a $50 minimum, $6,000 at 24% APR with a $150 minimum, and $10,000 at 13% APR with a $220 minimum, plus $200 extra each month — a $620 total monthly budget. The snowball method clears the $1,500 debt first and reaches debt-free in 36 months with about $4,586 in total interest. The avalanche method targets the 24% card first and also finishes in 36 months, but pays only about $4,203 in interest. In this case avalanche saves roughly $383 — real money, though not always as dramatic as people expect when the payoff timelines are similar.

Which method should you actually use?

Avalanche always wins on paper, but the gap depends on how different your APRs are and how long the payoff takes. Research on debt repayment behavior consistently finds that people who see quick wins are more likely to stick with a plan, which is the snowball's whole argument: closing an account in month three feels very different from watching a big balance shrink slowly. A practical approach many people land on:

• If the interest savings between the two methods is small, pick snowball for the motivation.
• If one debt's APR towers over the rest — a 25%+ card next to a 6% loan — lean avalanche.
• If a small debt and a high-APR debt are the same debt, the methods agree; just start there.
• Whichever you choose, automate the payments so the plan survives a busy month.

Getting the most out of the extra payment

The extra monthly payment is the engine of both strategies. In the example above, running the same three debts with no extra payment stretches the payoff to 62 months and about $6,350 in interest — the $200 extra cuts more than two years and roughly $1,760 in interest off the snowball plan. Even $25 or $50 a month compounds meaningfully, because every extra dollar reduces the balance that next month's interest is charged on.

Caveats and assumptions

This is a planning estimate, not a payoff schedule from your lenders. The simulation assumes fixed APRs, minimum payments that stay constant in dollars (real card minimums shrink as the balance falls, which actually slows payoff), no new charges, and no fees. If your combined payments cannot keep up with the interest accruing, the calculator stops at 600 months and warns you instead of showing a misleading date. Results are educational and not financial advice — for hardship options like consolidation or debt management plans, talk to a nonprofit credit counselor.