How this calculator works
Simulates month by month: every debt gets its minimum, the extra goes to the priority debt, and each cleared minimum rolls onto the next one. Avalanche (highest APR first) always costs the least interest; snowball (smallest balance first) clears a debt sooner, which is what keeps many people going.
- Each month: interest (APR ÷ 12) is added to every open balance, every debt gets its minimum payment, and your extra goes to the priority debt.
- Snowball puts the smallest balance first. Avalanche puts the highest APR first.
- When a debt is paid off, its minimum payment rolls into the extra and goes to the next debt in line. That rollover is the "snowball".
Worked example
With these inputs: method Avalanche (highest APR first); extra per month on top of minimums $100; balance $4,000; apr 22%; minimum payment $120; balance $9,000; apr 7%; minimum payment $200.
The result is debt-free in 3 years, with total interest $2,106.78 and starting balance $13,000.00.
Snowball or avalanche: which should you choose?
Avalanche is the mathematically cheapest order. Money goes first to the debt charging the most interest, so less interest accumulates overall. The calculator's own tests check that avalanche never costs more than snowball.
Snowball often wins in practice because it clears a whole debt sooner. Crossing a debt off is motivating, and a plan you stick with beats a cheaper plan you abandon. If the interest difference shown under the result is small, snowball is an easy choice. If it's large, avalanche is worth the patience.
Making the plan stick
The extra payment only works if it happens every month. Add it as a recurring bill — "Debt extra payment" — due the day after payday, so it's set aside before anything else gets spent.
Keep paying the same total every month. When a debt is cleared, don't treat its old minimum as spare money: it now goes to the next debt. The table under the result shows when each rollover happens.
Frequently asked questions
What is the debt snowball method?
You pay the minimum on every debt and put every extra dollar toward the smallest balance. When it's paid off, you add its payment to the next-smallest debt, so the amount going to each debt grows like a rolling snowball.
What is the debt avalanche method?
The same rollover idea, but debts are ordered by interest rate, highest first. It minimises total interest, so it's usually faster and cheaper — especially when a high-APR debt also has a large balance.
How much extra should I put toward debt each month?
Whatever you can sustain. Try a few amounts in the calculator: the debt-free date moves a lot with the first $50–$100 extra, and less with each dollar after that. The 50/30/20 Budget Calculator can help find the money.
Why does it say the plan never pays off?
At least one minimum payment is smaller than the interest that debt charges each month, so its balance grows. Raise that minimum or the extra amount until the warning goes away.
Can I include a car loan or student loan?
Yes. Any debt with a balance, an APR and a monthly payment works. Mortgages usually stay out of snowball plans because of their size and low rate.