Debt payoff calculator
Order and term for paying off several debts: snowball or avalanche.
Fill in the fields and the result will appear here automatically.
Simulates several debts to show duration, interest and closure order for fixed minimum payments and an extra amount. Snowball directs the extra to the smallest current balance; avalanche uses the highest rate. A closed debt frees its minimum from the next month. Compare two runs with identical inputs: this payment-transfer model does not guarantee that avalanche always costs less or snowball always produces an earlier first closure.
How it works
Formula and logic
Each month first accrues interest at annual percentage / 1200 and makes minimum payments. The extra amount plus minimums from debts closed BEFORE that month goes to one remaining debt: the smallest current balance for snowball or highest rate for avalanche. Unused payment money at closure is not transferred to another debt in the same month; the freed minimum joins from the next month. This particular monthly model does not round internal amounts and covers at most 20 debts and 1200 months. Reaching the horizon does not establish that repayment is impossible.
Example
Debt 40,000 at 12% with minimum 2,000 and debt 200,000 at 26% with minimum 6,000, plus an extra 4,000 a month, clear in 26 months by avalanche and 27 by snowball under the specified payment-transfer timing.
Fields and units
- Debts: name, balance, rate, minimum payment — name; balance and monthly payment in one currency; annual rate in %
- Spare money per month — $
- Strategy — list option
How to use
- — One debt per line: name, balance, annual rate and minimum payment.
- — The name may be several words — the numbers are read from the end of the line.
- — Spare money is what you are willing to pay above the minimums.
- — Compare both strategies on the same debts: the difference shows up in the interest.
Method and limitations
- Calculation method
- Formula and logic
- Data or methodology source
- CFPB, United States: highest-rate and snowball definitions; not validation of this simulation timing
- Limitation
- Rates and minimums are fixed; there are no new debts or fees. The table shows the selected strategy; calculate both separately to compare them. Its payment-transfer timing can differ from contracts and from models that direct all unused budget to the next debt in the same month.
FAQ
Which strategy costs less?
Compare duration and interest after running each mode separately. Avalanche chooses the highest rate; snowball chooses the smallest current balance. Transfers begin next month and unused money is not redirected within the same month, so no universal ranking is asserted.
Why simulate month by month instead of using a formula?
Interest and minimums change balances each month, and debt closure changes allocation. Simulation preserves that order. Some simple cases admit a closed formula; claiming that a formula is never possible would be incorrect.
What if the minimum payment does not cover the interest?
One insufficient minimum does not prove impossibility: another debt can close and release its payment. For example, 10 at 0% with minimum 10 and 100 at 120% with minimum 5, with no extra, clear in 14 months in this model. The 1200-month limit is only a simulation boundary.
Are new card purchases included?
No. The debt list is fixed, with no new purchases or fees. Recalculate the inputs for new obligations; the previous duration no longer describes the changed budget.