Make a Plan to Become Debt-Free
Paying off several debts at once is easier with a plan. This debt payoff calculator compares the two most popular strategies, the debt snowball and the debt avalanche. Enter each debt's balance, interest rate (APR) and minimum payment, plus any extra amount you can pay each month. You will see your debt-free date, total interest and the order in which each debt is paid off under both methods.
Debt Snowball vs. Debt Avalanche
Example: with $4,500 on a 24.99% card, $1,200 on a 19.99% card and $9,800 on a 6.9% car loan, plus $200 extra a month, both methods finish in 26 months. The avalanche costs about $2,043 in interest and the snowball about $2,117. Paying only each minimum would take 58 months and cost about $4,781 in interest.
- Avalanche: pay the minimum on everything and put every extra dollar toward the debt with the highest interest rate. This always costs the least interest.
- Snowball: put every extra dollar toward the smallest balance first. Paying off small debts quickly gives early wins that keep many people motivated.
- In both methods, when a debt is paid off its minimum payment rolls over to the next target, so your payments snowball over time.
Tips for Paying Off Debt Faster
- Stop adding new charges to the cards you are paying off.
- Call your card issuers and ask for a lower APR, or consider a 0% balance transfer if the fees make sense.
- Put windfalls such as tax refunds and bonuses toward your target debt.
- Keep a small emergency fund so surprise expenses do not land back on a credit card.
Frequently Asked Questions
Which is better, the debt snowball or the debt avalanche?
The avalanche saves the most money, because it attacks the highest interest rate first. The snowball can be easier to stick with because you pay off debts sooner. The best method is the one you will follow, and this calculator shows how much each one costs.
Why does the calculator say my payments do not cover the interest?
If a minimum payment is smaller than the monthly interest on that debt, the balance grows and it can never be paid off. Increase that minimum payment or add an extra monthly amount.
Should I include my mortgage?
Usually not. Debt payoff plans focus on higher-interest consumer debts like credit cards, personal loans and car loans. Mortgages are typically paid on their normal schedule.