Debt Payoff Calculator
Compare snowball and avalanche methods to pay off debt faster. See how extra payments save you money.
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Your Debts
Additional amount to pay each month beyond minimums
Saves the most money on interest
Debt Payoff Strategies Explained
There are two popular strategies for paying off multiple debts: the avalanche method and the snowball method. Both involve making minimum payments on all debts while putting extra money toward one debt at a time.
The key difference is which debt you prioritize first. Your choice depends on whether you want to minimize interest paid (avalanche) or build psychological momentum (snowball).
Avalanche Method (Highest Interest First)
The avalanche method prioritizes debts with the highest interest rates. You pay minimums on everything, then put all extra money toward the highest-rate debt. Once it's paid off, you move to the next highest rate.
Pros
- Saves the most money on interest
- Mathematically optimal
- Faster overall payoff time
Cons
- May take longer to see first debt eliminated
- Requires discipline without quick wins
Snowball Method (Lowest Balance First)
The snowball method prioritizes debts with the lowest balances. You pay minimums on everything, then put all extra money toward the smallest debt. Quick wins build momentum and motivation.
Pros
- Quick psychological wins
- Builds motivation
- Easier to stick with long-term
Cons
- Pays more in interest overall
- Not mathematically optimal
Power of Extra Payments
Even small extra payments can dramatically reduce your payoff time and interest paid. As you pay off each debt, roll that payment into the next debt for accelerating payoff power.
Example: Adding just $100/month extra to a $10,000 debt at 18% APR saves over $2,000 in interest and pays it off 2 years faster.
Tips for Faster Debt Payoff
Automate your payments to never miss a due date.
Use windfalls (tax refunds, bonuses) for extra debt payments.
Consider balance transfer cards for high-interest debt.
Cut expenses temporarily to increase extra payments.
Celebrate each paid-off debt to stay motivated.
Don't accumulate new debt while paying off existing debt.
How to Use This Calculator
- 1
Add all your debts with their current balances, interest rates, and minimum payments.
- 2
Enter any extra amount you can pay each month beyond the minimums.
- 3
Choose your preferred payoff strategy (avalanche or snowball).
- 4
Click Calculate to see your payoff timeline and total savings.
- 5
Compare both strategies to see which works best for you.
Payoff Examples
Credit Card Debt - Avalanche
3 credit cards: $5,000 at 22%, $3,000 at 18%, $2,000 at 15% | Extra payment: $200/month
Paid off in 24 months | $1,847 interest saved vs minimum payments
Mixed Debt - Snowball
Car loan $8,000 at 6%, Credit card $2,000 at 20%, Medical $500 at 0% | Extra: $150/month
Medical paid in 4 months, then credit card, then car | Quick wins build momentum
High-Interest Focus
Student loans $25,000 at 6%, Credit cards $8,000 at 24% | Extra: $300/month
Avalanche saves $3,200 more than snowball | Credit cards paid first despite higher balance
Frequently Asked Questions
Which method is better - avalanche or snowball?
Avalanche saves more money mathematically. Snowball provides psychological wins. Choose avalanche if you're disciplined, snowball if you need motivation. The best method is the one you'll stick with.
How much extra should I pay each month?
Pay as much as you can comfortably afford after essential expenses. Even $50 extra makes a difference. Review your budget to find areas to cut temporarily.
Should I save or pay off debt first?
Generally, keep a small emergency fund ($1,000), then focus on high-interest debt. The interest you save usually exceeds what you'd earn in savings.
What about 0% balance transfer offers?
These can be great for high-interest debt, but watch for transfer fees and the rate after the promo period. Have a plan to pay it off before the promo ends.
Should I close accounts after paying them off?
Not necessarily. Closing accounts can hurt your credit score by reducing available credit. Consider keeping them open with zero balance, especially older accounts.
What if I can't make minimum payments?
Contact your creditors to discuss hardship programs. Consider credit counseling from a non-profit agency. Prioritize secured debts (home, car) over unsecured.
How does debt payoff affect my credit score?
Paying off debt improves your credit utilization ratio, which can boost your score. However, closing accounts may temporarily lower it. Overall, less debt = better credit long-term.
Should I pay off my mortgage early too?
Focus on high-interest debt first (usually credit cards). Mortgage rates are typically low, and the interest is tax-deductible. Max out retirement contributions before extra mortgage payments.