Debt Payoff Calculator
Enter your debts and extra monthly payment to see your payoff timeline, total interest cost, and a side-by-side comparison of the snowball and avalanche methods.
Enter your debts
Add each debt below. The calculator will compare both payoff strategies automatically.
36 months
Debt-free by paying highest-rate debts first.
37 months
Pay off smallest balances first for quick wins.
How to use this calculator
Enter each debt with its current balance, annual interest rate (APR), and required minimum monthly payment. Set the extra monthly payment amount you can afford beyond all minimums. The calculator simulates month-by-month payoff using both the avalanche (highest rate first) and snowball (smallest balance first) strategies, showing total interest, payoff timeline, and how much you save compared to paying only minimums.
Quick tips
- Avalanche method targets the highest interest rate first. It minimizes total interest paid and is mathematically optimal.
- Snowball method targets the smallest balance first. You pay off individual debts faster, which builds momentum and motivation.
- Both methods apply your extra payment to one debt at a time. Once that debt is paid off, its minimum payment rolls into the next target.
- Even an extra $50 per month can cut years off your payoff timeline and save hundreds or thousands in interest.
- If two debts have similar interest rates, target the smaller balance first. The interest savings are minimal, but the psychological win is real.
- Avoid taking on new debt while paying off existing balances. Adding new debt resets your progress and extends the timeline significantly.
Common mistakes when paying off debt
- Paying only minimums: Minimum payments are designed to keep you in debt longer. On a $5,000 credit card at 19.9% with a $100 minimum, you would pay over $3,000 in interest and take nearly 8 years to pay it off.
- Spreading extra payments across all debts: Splitting your extra cash equally across debts feels fair but wastes money. Focus the entire extra amount on one debt at a time for the fastest payoff.
- Ignoring interest rates: A $2,000 credit card at 24% costs more per month in interest than a $10,000 car loan at 5%. Rate matters more than balance when minimizing total cost.
- Not accounting for fees: Some debts have annual fees, origination fees, or prepayment penalties. Factor those into your decision about which debt to target first.
Good use cases
Useful for anyone juggling multiple debts (credit cards, auto loans, student loans, personal loans) and deciding where to direct extra payments. Also helpful for comparing whether consolidating at a lower rate would save you money versus staying on the avalanche plan.
FAQ
What is the difference between the snowball and avalanche methods?
The avalanche method pays off the debt with the highest interest rate first, minimizing total interest paid. The snowball method pays off the smallest balance first, giving you quicker wins that build motivation. Both use the same extra payment amount -- the difference is the order in which debts are targeted.
Which method saves more money?
The avalanche method always saves more money on interest (or ties if all rates are equal). The difference can range from negligible to thousands of dollars depending on the spread of interest rates across your debts. However, research shows many people stick with the snowball method longer because the quick wins keep them motivated.
How much extra should I pay each month?
Any amount helps. Even $25 extra per month makes a measurable difference on high-interest debt. A common starting point is to redirect any discretionary spending you can cut -- a subscription, dining out once less per week, or a side income source. Use this calculator to see the impact of different extra payment amounts.
Should I pay off debt or save for an emergency fund first?
Most financial advisors recommend building a small emergency fund ($500 to $1,000) before aggressively paying down debt. Without that cushion, any unexpected expense forces you back onto credit cards, undoing your progress. Once you have that starter fund, focus on debt payoff, then build the emergency fund to 3-6 months of expenses.
Does this calculator account for compound interest?
Yes. The calculator applies monthly compounding (APR divided by 12) to each remaining balance every month. This matches how most credit cards and loans calculate interest. If your lender compounds daily, the actual interest will be slightly higher, but the difference is small for planning purposes.