Debt Payoff Calculator (Snowball & Avalanche)

Pay down multiple debts the smart way. Enter your balances, see how long it'll take, and compare the two proven payoff strategies side by side.

Snowball vs Avalanche — which one?

Both methods involve paying the minimum on every debt and throwing every spare pound at one debt at a time until it's gone, then rolling that payment into the next target. They differ on which debt you attack first:

• Avalanche targets the highest interest rate first. Mathematically optimal — it always saves the most money and finishes fastest.
• Snowball targets the smallest balance first. You pay slightly more in total interest, but you get a fast win that builds momentum. Behavioural research (notably a 2016 study by Brown and Lahey at the Kellogg School) found that people who use snowball are more likely to actually finish — the psychology of small wins outweighs the small extra cost.

If you trust yourself to stay disciplined for years, pick avalanche. If you've started and quit a debt plan before, pick snowball. The best method is the one you'll actually follow through on.

How the math works

Each month, every debt accrues interest equal to its balance times the monthly APR (APR ÷ 12). The minimum payment for each is subtracted from its balance. Then the “extra payment” — plus any minimums freed up by already-paid-off debts — is applied to the current target debt. When a debt hits zero, its full payment rolls into the attack pile, accelerating everything that follows. This rollover effect is where the “snowball” metaphor comes from.

Worked example

Three debts: £4,500 credit card at 22.9%, £9,800 car loan at 8.5%, £3,200 personal loan at 12%. Minimums total £495/month. Add a £150 extra payment per month. With avalanche, you target the credit card first (highest APR), then the personal loan, then the car. Debt-free in roughly 40 months, total interest paid about £3,100.

With snowball, you'd target the £3,200 personal loan first, then the credit card, then the car. Debt-free in roughly the same time, but about £200 more in interest. That £200 is the price of motivation — often worth it.

If your minimum payment doesn't cover interest

Some credit cards and payday loans have minimums set so low that they barely cover the monthly interest. If your minimum payment is less than the monthly interest charge, your balance grows every month — you're going backwards. This calculator will refuse to compute in that case and tell you the minimum payment you'd need to make any progress at all. The fix is to pay more than the minimum, no matter how small the increase.

What this calculator does NOT model

• Variable APRs (e.g., credit cards that change rate quarterly)
• 0% introductory periods that revert to high rates
• Balance transfer fees or origination fees
• Late fees, over-limit fees, or other penalty charges
• Taxes on debt forgiveness (rare, but applies if you settle)
• Credit score impact of carrying or paying down balances

Disclaimer

Educational only — not financial advice. If your debt feels overwhelming or is growing despite your best efforts, talk to a non-profit credit counsellor or licensed debt advisor in your country before doing anything drastic.