The two strategies
Both strategies start the same way: you pay the minimum on every debt, then put every spare dollar toward one target debt. When that debt is gone, its minimum payment "rolls over" to the next target, so your payments snowball in size even though your budget stays the same. The only difference is the order:
- Avalanche: target the debt with the highest interest rate first. This minimizes the interest you pay in almost every case, because your extra money always goes where interest is most expensive.
- Snowball: target the debt with the smallest balance first. You clear individual debts sooner, and those early wins help many people stay motivated.
How to use this calculator
- Enter each debt's current balance, APR (the annual interest rate on your statement) and minimum monthly payment. Leave unused rows empty or at 0.
- Enter the extra amount you can pay each month on top of all the minimums.
The calculator runs both strategies month by month and shows how long each takes, the total interest you'd pay, the order your debts are paid off, and a chart of your total balance over time.
Worked example
Using the default inputs: four debts totaling $23,500, with $710 in minimum payments plus $300 extra, a total budget of $1,010 a month.
| Debt | Balance | APR | Minimum |
|---|---|---|---|
| Credit card | $6,000 | 24.99% | $180 |
| Car loan | $12,000 | 7.5% | $350 |
| Store card | $1,500 | 29.99% | $50 |
| Personal loan | $4,000 | 11% | $130 |
| Result | Avalanche | Snowball |
|---|---|---|
| Debt-free in | 2 years 3 months | 2 years 3 months |
| Total interest | $3,367 | $3,740 |
| Payoff order | Store card (month 5), credit card (17), personal loan (21), car loan (27) | Store card (month 5), personal loan (13), credit card (22), car loan (27) |
The avalanche saves $373 in interest by attacking the 24.99% credit card before the 11% personal loan. The snowball clears the personal loan 8 months sooner, giving a second quick win.
For comparison, paying only the minimums, with no extra and each paid-off debt's minimum still rolled into the next, takes 3 years 8 months and costs about $7,330 in interest, more than twice as much.
Which one should you choose?
If you'll stick with either plan, the avalanche saves the most money. The difference is largest when your debts have very different interest rates and large balances. If you've tried and given up before, the snowball's faster early wins can be worth a somewhat higher interest cost, because the plan you actually finish beats the "optimal" plan you abandon. When your smallest debt also has the highest rate, as with the store card above, both methods start in the same place.
How the calculation works
- Each month, interest is added to every balance:
balance × APR / 12. - Every debt gets its minimum payment (or the rest of its balance, if smaller).
- Whatever is left of your monthly budget goes to the target debt: highest APR for avalanche, smallest balance for snowball. If it pays that debt off, the remainder moves on to the next target in the same month.
- Your total budget stays the same every month, so paid-off minimums automatically roll over.
Assumptions and limitations
- Fixed minimum payments: many credit cards lower the minimum as the balance falls. Keeping the higher payment, as this calculator does, is what makes the plan work.
- No new charges: the plan assumes you stop adding to the debts while paying them off.
- Monthly interest: card issuers usually calculate interest daily on your average balance, so real totals can differ slightly. Promotional 0% rates, fees and penalty APRs aren't included.
Frequently asked questions
Why do both methods take the same number of months?
With the same monthly budget, the total paid off each month is similar either way, so the debt-free date is often identical or within a month or two. The real difference is how much of your money goes to interest along the way.
What if my payments don't cover the interest?
If a debt's interest is larger than what you can pay, the balance keeps growing. The calculator warns you when your debts can't be paid off within 50 years. Increasing the extra payment, or asking the lender for a lower rate or a hardship plan, are the usual next steps.
Should I consolidate my debts instead?
A consolidation loan or 0% balance transfer can lower your interest rate, which helps with either strategy. Watch for transfer fees and for promotional rates that jump after the intro period, and avoid running the old cards back up.