Debt Payoff Calculator
Add multiple debts and compare two popular payoff strategies: the Debt Avalanche (highest interest first) and Debt Snowball (lowest balance first). See which strategy saves you the most money and gets you debt-free faster.
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About Debt Payoff Calculator
If you have multiple debts, deciding which to pay off first can significantly impact how long it takes to become debt-free and how much interest you'll pay. This calculator helps you compare two popular strategies and find the best approach for your situation.
By adding all your debts and specifying any extra payment amount, you can see exactly which strategy will save you the most money and get you out of debt faster.
Payoff Strategies Explained
Debt Avalanche (Highest Interest First)
With the avalanche method, you pay minimum payments on all debts, then put any extra money toward the debt with the highest interest rate. Once that debt is paid off, you move to the next highest rate.
Pros: Saves the most interest overall, mathematically optimal
Cons: May take longer to pay off the first debt, less psychological motivation
Debt Snowball (Lowest Balance First)
With the snowball method, you pay minimum payments on all debts, then put any extra money toward the debt with the smallest balance. Once that debt is paid off, you move to the next smallest.
Pros: Quick wins provide motivation, faster to pay off first debt
Cons: Pays more interest overall, not mathematically optimal
What This Calculator is Good For
- Strategy Comparison: See which method saves more money and time.
- Motivation Planning: Choose the strategy that keeps you motivated.
- Budget Planning: Calculate total debt and payoff timeline.
- Financial Goals: Set realistic targets for becoming debt-free.
- Scenario Testing: See how extra payments impact your payoff date.
- Debt Consolidation Decisions: Evaluate whether consolidation makes sense.
Limitations & Considerations
- Fixed Interest Rates: This calculator assumes constant APRs. Variable rates may change.
- No New Charges: Assumes you won't accumulate new debt during payoff.
- Fees Not Included: Late fees or other charges are not factored in.
- Minimum Payment Estimates: Actual minimum payments may vary by lender.
- Promotional Rates: 0% APR offers or rate changes are not considered.
- Income Changes: Assumes extra payment amount stays constant.
Payoff Strategy Formulas
1. Sort debts by interest rate (highest to lowest)
2. Pay minimums on all debts
3. Apply extra payment to highest-rate debt
4. When highest-rate debt is paid, move extra to next highest
5. Repeat until all debts are paid
Debt Snowball (Lowest Balance First):
1. Sort debts by balance (lowest to highest)
2. Pay minimums on all debts
3. Apply extra payment to lowest-balance debt
4. When lowest-balance debt is paid, move extra to next lowest
5. Repeat until all debts are paid
Monthly Interest Calculation:
Monthly Interest = (Balance × APR) ÷ 12
Frequently Asked Questions
The Debt Avalanche is mathematically superior because it targets the highest interest rates first, saving you the most money overall. However, the Snowball's psychological wins can keep you motivated.
Even small extra payments make a big difference. Start with what you can afford—even $50-100/month can significantly reduce your payoff time and interest paid.
Consolidation can help if you get a lower interest rate. Use this calculator to compare your current strategy with a consolidated loan scenario.
If you can't afford minimums, consider debt consolidation, balance transfers, or speaking with a credit counselor about debt management options.
Yes! Many people start with Snowball for motivation, then switch to Avalanche once they have momentum. Use this calculator to compare both approaches.