Debt Snowball vs. Avalanche Calculator

Understanding Debt Payoff Strategies

When you have multiple debts, choosing a focused payoff strategy can significantly accelerate your journey to becoming debt-free. The two most popular methods are the Debt Snowball and the Debt Avalanche. This calculator models both to help you decide which approach is best for you.

How It Works

The calculator simulates your debt-repayment journey month by month under both scenarios. You input all your individual debts (balance, APR, and minimum payment) and the extra amount you can afford to pay each month (your "snowball").

• Debt Snowball Method: The calculator first sorts your debts from the smallest balance to the largest. It applies all your extra payment to the smallest debt while making minimum payments on the others. Once the smallest debt is paid off, its minimum payment is added to your extra payment, and this larger "snowball" is then directed at the next-smallest debt. This method provides quick psychological wins, which can be highly motivating.
• Debt Avalanche Method: The calculator sorts your debts from the highest APR to the lowest. It applies all your extra payment to the debt with the highest interest rate. Once that debt is eliminated, the snowball rolls to the debt with the next-highest APR. This method is mathematically optimal, as it minimizes the total amount of interest you pay over time.

Choosing the Right Method

The best method is the one you can stick with. The calculator's results will clearly show the trade-off: the Avalanche method will save you more money in interest, while the Snowball method will get you your first "win" faster. Seeing the exact numbers for your situation can help you make the most informed choice.

Frequently Asked Questions