Debt Payoff Calculator

When you have multiple debts, the fastest way to eliminate them is to pay minimums on all debts and put every extra dollar toward one target debt. Once that debt is paid off, roll its payment into the next target debt — a process called 'debt snowballing' or 'rolling.'

There are two main approaches, and each has different strengths. The **Avalanche method** ranks debts by interest rate (highest first). It's mathematically optimal — you pay the least total interest over the life of your debt. The **Snowball method** ranks debts by balance (smallest first). It's psychologically motivating — you get quick wins by eliminating smaller debts fast.

Neither is objectively 'better' — the best method is the one you'll stick with. Studies on debt repayment behaviour show that people who use snowball are more likely to complete the process because the early wins keep them motivated. But mathematically, avalanche saves more money.

The calculator simulates each month's payments to all debts. For each debt, it adds the monthly interest to the balance, then subtracts the payment (minimum + any extra directed to the target debt). When a debt is fully paid off, its minimum payment is rolled into the target debt as additional extra payment.

The simulation continues until all debts are zero. This gives you three comparable outcomes: the Avalanche timeline and total interest, the Snowball timeline and total interest, and the Minimum Payments Only baseline (which is what most people do, and which costs the most).

The difference between the three is often dramatic. On $53,000 in typical consumer debt ($5K credit card at 22%, $15K car loan at 7%, $25K student loan at 5.5%, $8K personal loan at 12%) with $500/month extra, Avalanche saves $4,000–7,000 in interest compared to minimum payments — and finishes 3–5 years earlier.

Debt payoff is as much a psychological challenge as a mathematical one. High-interest debt creates stress, and stress impairs decision-making. The snowball method addresses this by generating quick wins — paying off the smallest debt (often a credit card) in the first few months creates a tangible sense of progress that reinforces the behaviour.

The avalanche method is more efficient but slower to produce visible wins. If your highest-rate debt is also your largest (common — big student loans or auto loans), you might pay on it for a year before seeing it disappear. Some people lose motivation during this period and abandon the plan entirely.

The best approach for most people: use the avalanche method for the first 2–3 months (to demonstrate the process), then switch to snowball if motivation becomes an issue. Or use a hybrid: eliminate the smallest debt first for a quick win, then switch to avalanche for the remaining balances. The math is more important than the method.