Debt Payoff Calculator

Compare the debt snowball and debt avalanche methods side-by-side. Add all your debts and see which payoff strategy saves you the most time and money.

Your Debts

Debt 1
Debt 2
Debt 3
$

Amount above all minimums

Total Debt:$25,000.00
Total Minimums:$600.00/mo

Add your debts and click Compare

See snowball vs. avalanche payoff strategies side by side

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Snowball vs. Avalanche: Which Is Better?

The two most popular debt payoff strategies are the debt snowball and the debt avalanche. Both involve making minimum payments on all debts and directing any extra money toward one targeted debt at a time. They differ only in how they choose which debt to target first.

The Debt Snowball method targets the smallest balance first, regardless of interest rate. Once the smallest debt is paid off, you roll that payment into the next smallest. The psychological benefit of quick wins can be powerful motivation, and behavioral research shows this method has higher completion rates.

The Debt Avalanche method targets the highest interest rate first. This is mathematically optimal because it minimizes total interest paid. The savings can be significant -- sometimes thousands of dollars. However, if your highest-rate debt also has the largest balance, it may take a long time to see your first payoff, which can be discouraging.

In practice, the best method is the one you will stick with. Both are dramatically better than paying only minimums. The extra payment amount matters more than the order -- even an additional $200/month can cut years off your debt-free date.

When calculating your payoff plan, remember that as each debt is paid off, its minimum payment is freed up and added to your extra payment amount. This snowball or avalanche effect accelerates payoff of subsequent debts, creating powerful momentum.

How the Payoff Methods Work

Debt Payoff Strategy

Extra Payment + Freed Minimums → Next Target Debt

Where:

Step 1 = Make minimum payments on all debts

Step 2 = Apply extra budget to target debt (smallest balance or highest rate)

Step 3 = When target is paid off, roll its minimum into the next target

Step 4 = Repeat until all debts are eliminated

Example

Example: $5,000 CC (22.99%), $12,000 Car (6.5%), $8,000 Student Loan (5.5%), with $200 extra/month

  • • Snowball targets: CC ($5K) -> Student Loan ($8K) -> Car ($12K)
  • • Avalanche targets: CC (22.99%) -> Car (6.5%) -> Student Loan (5.5%)
  • • In this case, both target the CC first since it is smallest AND highest rate
  • • After CC payoff, freed $100 minimum + $200 extra = $300 extra for next debt

Frequently Asked Questions

Which is better: snowball or avalanche?
Mathematically, the avalanche method saves more money because it targets the highest-rate debt first. However, the snowball method provides quicker wins, which can boost motivation. Studies show people using the snowball method are more likely to become debt-free. The best method is the one you'll stick with.
How much extra should I pay each month?
As much as you can comfortably afford. Even an extra $100-200/month makes a dramatic difference. Look at your budget for expenses you can temporarily cut -- streaming services, dining out, subscriptions -- and redirect that money toward debt.
Should I use savings to pay off debt?
Keep a small emergency fund ($1,000-2,000) first, then direct extra money toward high-interest debt. The interest you save (18-25% on credit cards) far exceeds what savings accounts earn (4-5%). After debt is gone, rebuild your full emergency fund.
What about debt consolidation?
Consolidating multiple debts into a single lower-rate loan can simplify payments and save interest. However, it works best if you stop using credit cards and commit to paying off the consolidation loan. Use the loan comparison calculator to evaluate options.
How is the 'freed minimum' snowball effect calculated?
When you pay off a debt, its minimum payment no longer needs to go there. That freed-up amount is added to your extra payment budget, which then goes toward the next target debt. This cascading effect means each subsequent debt gets paid off faster.