About the Debt Payoff Calculator
A debt payoff calculator compares strategies for clearing multiple debts with a fixed total monthly budget. The two established approaches — avalanche and snowball — differ in which debt they target first, and the choice is as much psychological as mathematical.
The formula
Avalanche: highest rate first. Snowball: smallest balance first.Both methods pay minimums on every debt and direct all surplus at one target. When that debt clears, its payment rolls into the next, which is what accelerates the process.
How to use this calculator
- 1Enter your Debt 1 Balance ($). The field starts at
8000, which you can overwrite. - 2Enter your Debt 1 Interest (%). The field starts at
24, which you can overwrite. - 3Enter your Debt 2 Balance ($). The field starts at
5000, which you can overwrite. - 4Enter your Debt 2 Interest (%). The field starts at
18, which you can overwrite. - 5Enter your Total Monthly Payment ($). The field starts at
600, which you can overwrite. - 6Read the result straight away — it recalculates as you type, so there is no button to press. Use Share to copy a link that reopens the page with your exact numbers filled in.
Worked example
| Input | Value |
|---|---|
| Debt 1 Balance ($) | 8000 |
| Debt 1 Interest (%) | 24 |
| Debt 2 Balance ($) | 5000 |
| Debt 2 Interest (%) | 18 |
| Total Monthly Payment ($) | 600 |
Result
Total Debt: $13,000.00
Avg Interest Rate: 21.69%
Payoff Time: ~28 months
Total Interest: $3645.91
Total Paid: $16645.91
Those are the values the page loads with, so you can reproduce this result yourself and then change one field at a time to see what drives the outcome.
Understanding your result
The avalanche method minimises total interest by definition, since it always attacks the most expensive debt. The snowball method clears the smallest balance first, producing a visible win sooner. Research suggests the snowball's early wins improve follow-through enough that it often produces better real-world outcomes despite costing slightly more on paper.
What makes either method work is the rollover. Once a debt is cleared, its payment does not return to your spending — it joins the attack on the next debt. The total monthly outlay stays constant while the amount directed at principal grows steadily, which is why the last debts clear far faster than the first.
Things worth knowing
- Keep the total monthly payment fixed. Rolling each cleared payment forward is what creates the acceleration.
- The interest difference between avalanche and snowball is usually small. Adherence matters more than optimisation.
- Build a small emergency buffer first, or an unexpected expense goes straight back on a card.
- Ask each lender for a rate reduction before starting. It costs nothing and improves either method.
- Track progress visibly. Seeing balances fall is a significant part of why these methods succeed.
Frequently asked questions
Which is better, avalanche or snowball?+
Avalanche costs less in interest; snowball produces faster visible wins and better adherence for many people. The difference in total cost is usually modest, so choose the one you will actually stick to.
How does the rollover work?+
When one debt clears, you add its payment to what you were already paying on the next. Your total monthly outlay stays the same but the amount hitting principal grows, so each successive debt clears faster.
Should I save or pay off debt first?+
Build a small emergency buffer of around 1,000 dollars first so an unexpected cost does not go on a card, then attack high-interest debt aggressively before building the fund further.
Does paying off debt improve my credit score?+
Yes, particularly reducing credit card utilisation, which is a major scoring factor. Paying down revolving balances typically helps more than paying down instalment loans.