Debt Payoff Calculator

How to use this calculator

Add each debt with three numbers you can read straight off its latest statement: the current balance, the APR, and the required minimum payment. Then enter the extra amount you can put toward debt each month beyond the minimums — even zero works, which shows your baseline.

• Strategy toggle. Avalanche sends every spare unit to the highest-rate debt; Snowball sends it to the smallest balance. The results panel always shows what the other strategy would have cost, so you're never choosing blind.
• Rolling minimums. When a debt is cleared, its minimum payment automatically joins your extra budget (that's the "snowball" effect, and the calculator applies it to both strategies).
• The Payoff order table shows the month and date each debt dies; the Monthly timeline view tracks total balance, interest accrued and amount paid every month, and exports to CSV.

If a debt's minimum doesn't even cover its monthly interest, the calculator will tell you rather than pretend: that debt needs a bigger payment or a lower rate before any plan works.

Snowball vs avalanche: what really differs

Both strategies pay every minimum every month, and both throw all spare budget at one target debt at a time. The only difference is targeting: avalanche attacks the highest interest rate first, snowball attacks the smallest balance first.

Avalanche is mathematically optimal — money aimed at a 22.9% balance stops more interest than the same money aimed at a 9.5% balance, full stop. In the default example (three debts totaling $25,000 with $300/month extra), avalanche costs $4,773 in interest versus snowball's $5,308: a $534 difference, with both finishing in 33 months.

So why does snowball exist? Because it front-loads wins. Killing the $5,000 personal loan first (snowball's order) produces a paid-off account months earlier than avalanche's order does, and each cleared debt frees a minimum payment that makes the next one fall faster, a visible feedback loop that people stick with. Research on debt repayment behavior consistently finds completion matters more than optimization: the best strategy is worth nothing abandoned in month six.

The honest takeaway from running real numbers: for many debt profiles the strategies differ by tens of dollars per month of effort, not thousands. When the gap is small, pick the one that keeps you motivated. When one debt's rate towers over the rest, as payday loans and many credit cards do, avalanche's advantage grows and is usually worth taking. This calculator's job is to show you the actual size of the gap for your debts, so the choice is informed rather than ideological.

Formula and methodology

There's no closed-form formula for multi-debt payoff, so the calculator runs a month-by-month simulation, the same way your statements will unfold:

1. Interest accrues on every open balance at its own monthly rate (APR ÷ 12).
2. Every debt receives its minimum payment.
3. The extra budget, plus the minimums of any already-cleared debts, goes entirely to the target: highest APR (avalanche) or smallest starting balance (snowball).
4. When the target dies, the next debt in order becomes the target.

The simulation runs until every balance reaches zero, capping at 100 years. Interest totals are the sum of all monthly accruals, rounded to the cent. Both strategies are simulated on every calculation so the comparison is always exact for your inputs, and a minimums-only baseline is computed the same way.

Worked example

What changes the result

• The extra amount is the main event. Going from $0 to $300 extra in the example saves ~$5,558; choosing avalanche over snowball saves $534. Strategy tunes the plan; the budget drives it.
• Rate spread. The wider the gap between your highest and lowest APR, the more avalanche wins. Debts clustered around similar rates make the strategies nearly identical.
• Balance distribution. A tiny debt at a low rate is snowball's best case: clearing it quickly frees its minimum for the real fight at little interest cost.
• New debt. The simulation assumes no new borrowing. A plan that's technically perfect fails if the cleared credit card gets reloaded. Closing or freezing paid-off revolving accounts is a behavioral, not mathematical, decision.

Assumptions and limitations

• APRs are treated as fixed; credit-card rates are typically variable and can change with the market or a missed payment. Promotional 0% periods that later jump aren't modeled, so enter the post-promo rate for a conservative plan.
• Minimum payments are modeled as constant amounts. Real card minimums are often a percentage of the balance and shrink as you pay down, which stretches minimum-only payoff even longer than shown, so the fixed-minimum assumption is the conservative, planning-friendly choice.
• Fees (annual fees, late fees, balance-transfer costs) are not included.
• Interest compounds monthly here; many cards accrue daily. The difference over a payoff horizon is small but real.
• This tool shows the arithmetic of repayment strategies. It is not credit counseling or personalized advice. If minimums themselves are unaffordable, a nonprofit credit counselor or your lenders' hardship programs are the right next step.