Debt Payoff Calculator

Compare avalanche and snowball payoff strategies side-by-side. See your debt-free date, total interest paid, and how much you can save by choosing the right strategy.

Debt 1

Debt-Free Date

November 2027

21 months (1 years 9 months)

Strategy Comparison

Total Debt
$5,000
Avalanche Total Interest
$1,022
Snowball Total Interest
$1,022
Interest Saved (Avalanche)
$0

Payoff Timeline

Avalanche Payoff
21 months
Snowball Payoff
21 months
Total Paid (Avalanche)
$6,022
Total Paid (Snowball)
$6,022

Debt Balance Over Time (Avalanche)

Model your complete debt payoff plan

You'll be debt-free in 21 months. See how your debt payoff fits into your full financial picture — income, savings, investments, and more.

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Avalanche vs Snowball: Which Debt Payoff Strategy Is Right for You?

The two most popular debt payoff strategies are the avalanche method and the snowball method. Both work — and both are dramatically better than paying only minimums — but they approach the problem differently.

Avalanche Method

  • Targets highest interest rate first
  • Mathematically optimal — minimizes total interest
  • Gets you debt-free in fewest months
  • Best for disciplined, numbers-driven people
  • Saves the most money overall

Snowball Method

  • Targets smallest balance first
  • Provides quick psychological wins
  • Harvard research shows higher completion rates
  • Best when you need motivation to stay on track
  • Simplifies finances faster by eliminating accounts

The difference in total interest between the two methods is often smaller than people expect, especially when debts have similar interest rates. Use the calculator above to compare both strategies with your actual numbers.

How to Create a Debt Payoff Plan

1

List all your debts.

Include the creditor name, current balance, interest rate (APR), and minimum monthly payment for every debt you owe. Don’t forget medical bills, personal loans, and buy-now-pay-later balances.

2

Set a monthly debt budget.

Determine how much you can afford to put toward debt each month — the sum of all minimums plus any extra you can squeeze from your budget. Even $50 extra per month makes a significant difference.

3

Pick a strategy.

Choose avalanche (saves the most money) or snowball (provides the most motivation). Both are effective. The worst strategy is no strategy — paying random amounts on random debts.

4

Automate payments.

Set up automatic payments for the minimum on every debt, then manually or automatically send the extra to your priority debt. Automation prevents missed payments and late fees.

5

Track progress and celebrate milestones.

Each debt you eliminate frees up its minimum payment to redirect to the next debt. This acceleration effect is why both methods are called “cascading” strategies.

Tips to Accelerate Debt Payoff

Beyond choosing a strategy, here are proven ways to get out of debt faster:

Increase your income through side hustles, freelancing, overtime, or selling unused items. Even temporary income boosts can shave months off your timeline.

Cut expenses temporarily — dining out, subscriptions, entertainment — during your payoff period. This is a sprint, not a permanent lifestyle change.

Use balance transfers wisely. Transfer high-interest debt to 0% APR cards, but watch for transfer fees (3-5%) and pay off before the promo ends.

Consider debt consolidation into a single lower-rate personal loan. Just don’t rack up new debt on freed-up credit lines.

Redirect windfalls — tax refunds, bonuses, gifts — straight to debt. A $2,000 refund on a 22% APR card saves $440/year in interest.

Understanding Interest Rates

APR (Annual Percentage Rate) is the yearly interest rate you pay on your debt. Credit cards typically charge 18-28% APR, personal loans 6-36%, and student loans 4-8%. The higher the APR, the more of each payment goes to interest rather than paying down your balance.

APR is the simple annual rate, while APY (Annual Percentage Yield) accounts for compound interest. On a 24% APR credit card, the effective annual rate with monthly compounding is actually 26.8%.

Compound interest works against you with debt. When you carry a balance, interest is charged on your outstanding balance including previously accrued interest. This is why minimum payments on credit cards barely move the needle — most of each payment goes to interest, not principal. Extra payments attack the principal directly, which reduces future interest charges.

See How Debt Payoff Fits Into Your Full Financial Plan

This calculator shows your debt payoff timeline. Trajectoryy's full simulator shows how eliminating debt impacts your entire financial picture — freed-up cash flow, increased savings, faster investment growth, and your path to financial independence.

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Frequently Asked Questions

What is the debt avalanche method?
The debt avalanche method prioritizes paying off debts with the highest interest rate first while making minimum payments on all other debts. Once the highest-rate debt is paid off, the freed-up money rolls into the next highest-rate debt. This method minimizes total interest paid and is mathematically the fastest way to become debt-free.
What is the debt snowball method?
The debt snowball method prioritizes paying off debts with the smallest balance first, regardless of interest rate. As each small debt is eliminated, you gain momentum and motivation — the 'snowball' effect. While you may pay slightly more in total interest than with the avalanche method, many people find the psychological wins help them stay on track.
Which debt payoff strategy is better: avalanche or snowball?
Mathematically, the avalanche method always saves you more money in interest. However, studies show that the snowball method leads to higher completion rates because the quick wins of paying off small debts keep people motivated. The best strategy is the one you'll actually stick with. If you're disciplined and motivated by numbers, choose avalanche. If you need psychological wins, choose snowball.
How much extra should I pay toward my debt each month?
Even an extra $50-$100 per month can dramatically shorten your payoff timeline and reduce total interest. The key is to find money in your budget you can consistently redirect to debt payments — whether from cutting expenses, increasing income, or redirecting windfalls. Use this calculator to see the exact impact of different extra payment amounts on your debt-free date.
Should I pay off debt or invest?
A common rule of thumb: if your debt interest rate is higher than the expected investment return (typically 7-10% for stocks), pay off the debt first. Credit card debt at 20%+ APR should almost always be prioritized. For lower-rate debt like mortgages (3-7%), it may make sense to invest while making minimum payments. Also consider your employer 401(k) match — that's an instant 100% return you shouldn't pass up.
Does this calculator account for minimum payment changes?
This calculator uses fixed minimum payments for simplicity. In reality, some debts (like credit cards) have minimum payments that decrease as your balance decreases — often 1-3% of the outstanding balance. Using a fixed minimum payment that matches your current minimum is a good conservative estimate that will actually help you pay off debt faster than the bank's declining minimum.
What about balance transfers and debt consolidation?
Balance transfers (moving high-rate debt to a 0% introductory rate card) and debt consolidation (combining multiple debts into one lower-rate loan) can be effective tools. However, they work best when combined with a payoff strategy. A balance transfer buys you time, but you still need a plan to pay it off before the promotional rate expires. Factor in transfer fees (typically 3-5%) when calculating if it's worthwhile.

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