Debt payoff calculator: snowball vs avalanche

The calculator assumes the APRs stay the same, each minimum stays the same, and nothing new is charged to the debts. Each month it charges every debt its APR ÷ 12 in interest, rounded to the cent, pays every minimum, and puts the rest of your monthly amount on the debt the method picks. When a debt is paid off, its minimum stays in the monthly amount and goes to the next one.

Snowball and avalanche, in short

Both methods work the same way. Pay the minimum on every debt, and put everything else you can afford on one debt at a time. When that debt is paid off, add what you were paying on it to the next one. They differ only in which debt comes first.

• Debt snowball: smallest balance first. List your debts from the smallest balance to the largest, whatever their interest rates. The first one is gone quickly, and each payoff makes the payment on the next one bigger, like a snowball rolling downhill.
• Debt avalanche: highest APR first. List your debts from the highest interest rate to the lowest. The extra money goes where it's charged the most, so less of what you pay goes to interest.

A worked example

The calculator starts with three debts and $900 a month for all of them:

The minimums add up to $609, so $291 is left each month for the debt the method picks. The snowball picks the personal loan, the smallest balance. The avalanche picks Visa, the highest APR.

1. Month 1, snowball. Visa is charged $6,800 × 24% ÷ 12 = $136.00 of interest, the personal loan $24.00 and the car loan $49.00. Each gets its minimum, and the $291 goes to the personal loan: it gets $401 and owes $2,424 − $401 = $2,023.00.
2. Month 1, avalanche. The same interest and minimums, but the $291 goes to Visa: it gets $495 and owes $6,936 − $495 = $6,441.00.
3. Month 7, snowball. The personal loan's last payment is $81.50. The rest of its $401 goes to Visa, and from month 8 Visa gets $605 a month: its own $204 plus the personal loan's $110 and the $291.
4. Month 19, snowball. Visa is paid off. From month 20 the car loan gets the whole $900, and its last payment, in month 24, is $838.17.

Both methods are debt-free in the same month here, 2 years 8 months sooner than paying only the minimums. The avalanche costs $245.32 less in interest. The snowball pays off its first debt 10 months sooner. All of these figures are what the calculator above shows for these numbers, with the first payment in November 2026.

Which one costs less

The avalanche never costs more in interest. With the same monthly amount, each extra dollar goes to the debt that charges the most for it, so no other order pays less interest. How much it saves depends on how far apart the rates are and how long the debts last: $245.32 in the example.

The case for the snowball is about sticking with the plan. Paying off a whole debt is a win you can see, and it leaves one less bill to keep track of. That's the common argument for it, and there's some research behind it. A 2012 study of nearly 6,000 clients of a debt settlement company, by David Gal and Blake McShane of Northwestern's Kellogg School, found that how many of their debts people had paid off predicted whether they finished the program better than the dollar amount they had repaid. The authors still noted that paying the highest rate first is the usual financial advice, and that starting small makes the most sense when the rates are close.

So look at both columns for your own debts. If the difference in interest is small, the snowball's early wins may be worth it to you. If it's large, the avalanche is worth the wait for its first payoff.

When the two give the same order

• The smallest balance has the highest APR. If your debts line up the same way by balance and by rate, both methods pick the same debts in the same order, and the results are identical.
• Equal rates. When two debts have the same APR, this calculator's avalanche pays the smaller balance first, which is the snowball's order.
• No interest. At 0% on every debt there's no interest to save. Both orders finish in the same month, because the same amount is paid every month either way; only which debt goes first changes.
• Close rates. When the rates are close, the orders can differ but the cost barely does.

Why the rollover matters

The rollover is what makes either method work. When a debt is paid off, its minimum doesn't go back into your spending: it stays in the monthly amount and goes to the next debt. The total you pay toward debt stays the same each month while the number of debts falls, so each one is paid off faster than the one before.

Paying only the minimums does the opposite. When a debt is paid off, the total you pay drops by its minimum. In the example the minimums add up to $609. Keep paying $609 a month as debts are paid off, with no extra at all, and you're debt-free in 40 months with $5,027.09 of interest. Pay only each debt's minimum, so the total falls to Visa's $204 once the loans are gone, and it takes 56 months and $5,783.03. The extra $291 a month on top of the rollover is what brings it down to 24 months.

About the math

Each month, in this order: every debt is charged its balance × the APR ÷ 12 in interest, rounded to the nearest cent; every debt is paid its minimum, or what it owes if that's less; and what's left of the monthly amount goes to the method's first debt that still owes money. If that pays it off, the rest goes to the next debt in the same month. The order is set once, from the balances and APRs you enter, and a one-time extra is added to what's left in the first month.

The minimums here are fixed amounts. A credit card's real minimum is worked out again from each statement's balance, so it shrinks as you pay the card down. Paying only a card's shrinking minimum takes longer than this calculator shows; the credit card payoff calculator works that out for one card. Keep paying the minimum you entered and the figures here apply.

Card issuers charge interest by the day, and many lenders count the exact days between payments, so your statements will differ a little from these figures. New charges, fees and rate changes aren't included. If a debt's payment can never get ahead of its interest, the calculator tells you which one, and it stops at 100 years. Everything is worked out in your browser. Nothing you type is sent anywhere.

In UrBudget

UrBudget doesn't have a snowball or avalanche planner of its own. Work out the order and the monthly amount here, then put the plan in your budget:

• A payment category for every card. Each credit card or line of credit gets its own payment category. Assign each card its minimum there, and the extra to the category of the card you're paying off first. The credit card guide shows how paying down an old balance works.
• Targets for the plan. Give each debt's category a Monthly debt payment or Monthly funding target with its amount from the plan, so the budget shows what's still needed each month.
• When a debt is paid off, move its amount to the next debt's target. That's the rollover, in your budget.
• The loan planner for loans. For a car loan, student loan, personal loan or mortgage, it shows the payoff date, the interest and what an extra payment saves, with the same monthly interest as this calculator and the loan payoff calculator.
• Watch the total fall. The Net worth report shows your debts month by month next to your assets, and the Balance sheet lists them by type.

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