Compare the snowball and avalanche methods across all your debts, with months to freedom and total interest for each.
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With several debts, the order you pay them in matters. The snowball method clears the smallest balance first, which gives quick wins and momentum. The avalanche method targets the highest interest rate first, which usually costs less overall. Both keep the minimum payment on every debt.
Enter each debt on its own line as name, balance, annual rate and minimum payment. The simulation adds monthly interest, pays the minimums, then sends your extra money to the chosen target. When a debt is cleared, its minimum payment rolls into the next one.
The avalanche method almost always costs less interest, because it reduces the most expensive debt first. The snowball method can be easier to stick with when a large debt would otherwise feel endless. The result shows the difference in dollars.
Enter 0 for the extra payment. The calculator then shows how long the minimum payments take. If the minimum is less than the monthly interest, the balance will not fall, and the result reports that the debt is not paid off within 50 years.
Debt with a high rate, such as credit cards at 20 percent or more, is usually worth clearing before investing. For low-rate debt, such as a mortgage at 3 percent, investing may give a higher expected return, though the choice depends on your risk tolerance.
No. Late fees, annual card fees and new borrowing are not modelled. Assume you will not add new debt, and keep the card unused while you pay it down.
Most minimum payments are a fixed share of the balance plus interest. Paying more than the minimum reduces the balance faster, which lowers future interest. Even a modest extra payment can cut the payoff time by many months.
No. The debts you enter are only used in your browser for this simulation.