How to plan your debt payoff
- List each debt with its balance, interest rate (APR) and minimum monthly payment. Credit cards, store cards, car loans, student loans and personal loans all work.
- Enter how much extra you can pay each month on top of the minimums.
- Compare the avalanche and snowball methods: time to debt-free, total interest and the order in which debts are cleared.
Avalanche vs snowball
Both methods pay the minimum on every debt and put all extra money towards one target. When that debt is gone, its minimum payment rolls into the next target, so your total monthly payment stays the same while the attack grows, which is why payoff speeds up over time.
The avalanche method targets the highest interest rate first. Mathematically it always costs the least interest and is usually the fastest. The snowball method, popularised by Dave Ramsey, targets the smallest balance first. It often costs a little more, but clearing whole debts early gives quick wins that help many people stay motivated. The calculator shows the exact difference for your debts, so you can decide whether the motivation is worth it.
The model assumes fixed rates, no new spending, interest charged monthly on the balance and payments made on time. Credit card interest is often calculated daily, so real figures may differ slightly. If a minimum payment does not cover the monthly interest, the debt grows forever; the calculator warns you. Your figures stay in your browser.
Which is better, snowball or avalanche?
Avalanche saves the most money; snowball can be more motivating. If the difference shown is small, pick the one you will stick with.
Should I include my mortgage?
Usually not. Mortgages have low rates and long terms; focus extra payments on high-interest consumer debt first.
What if I can't pay anything extra?
Set the extra to 0 to see the minimum-payment timeline, then try small amounts like 25 or 50 to see their effect.