Debt Payoff Calculator — avalanche vs. snowball on your debts

How it works

The simulation runs month by month. Each open debt accrues balance × APR ÷ 12; each receives its minimum payment; and the budget's remainder goes to one target — the highest-APR debt under the rate method, the smallest balance under the snowball, both as CFPB describes them: the rate method "focuses on your debts … with the highest rate of interest," while the snowball "focuses on your smallest debt," keeping "the minimum payments on all of your debts" and putting "any extra funds" toward the smallest. A retired debt's minimum rolls into the extra. The rate method never pays more total interest — targeting the costliest dollar first is arithmetically optimal — while the snowball buys earlier account payoffs, which is a motivational trade the table prices rather than judges. If the budget cannot cover the minimums, no plan exists and the page says so.

Worked example

With a single debt the simulation is a published loan: paying $146.89 a month on a $3,000 balance at 16% clears it in exactly 24 months (LibreTexts' worked pair, read as a payoff). On the default two-debt scenario — $5,000 at 12% with a $100 minimum plus $10,000 at 22% with a $150 minimum, on a $600 budget — this calculator's simulation reaches debt-free in about 32 months, with the rate-first ordering paying about $3,790 of interest against the snowball's $4,790 — roughly $990 saved by targeting the costlier debt first: its own figures for these inputs, and the shape of the gap whenever the small balance is not the expensive one.

Frequently asked questions

Which debts should the extra money go to first?

The two standard orderings answer differently. Highest-rate-first minimizes total interest — each extra dollar mutes the most expensive borrowing. The snowball clears the smallest account soonest, which CFPB notes helps some people stay motivated. This page computes both so the dollar cost of the motivational route is a number, not a guess.

How does the snowball method work?

As CFPB describes it: keep making the minimum payments on all of your debts, and put any extra funds toward the smallest debt. When it is gone, its minimum payment joins the extra against the next-smallest — the payment "snowballs" as accounts close, which is where the name comes from.

Why does the highest-rate method save interest?

Because interest accrues per dollar per rate: the same extra dollar cancels more interest on a 22% balance than a 12% one, every month it would have been owed. The saving compounds over the plan, and the gap between the methods grows with the spread between your rates and shrinks to zero when rates are equal.

What happens when one debt is paid off?

Its minimum payment does not leave the plan — it folds into the extra and accelerates whichever debt is next in the ordering. That rollover is why the last debt often falls much faster than the first, under either method.

Why does it say no plan exists?

The budget is below the sum of the minimum payments, so the accounts cannot all be kept current — no ordering fixes arithmetic. The options are structural: a larger budget, or changing the debts themselves, which is what the debt-consolidation calculator prices.

Do both methods finish at the same time?

Often close on generous budgets, since the total budget is identical and the finish line is dominated by dollars in versus interest out — but the gap grows as the budget tightens: the page's own $400-budget preset finishes in 57 months one way and 61 the other. The methods differ in the interest paid along the way and in when the individual accounts close.

How accurate is this, and what does it exclude?

The simulation is exact for fixed APRs, fixed minimums, and a constant budget. Real cards recompute minimums as balances fall (which slows real-world payoff versus fixed minimums), rates change, and new charges add principal — so treat the months as close estimates and the comparison between methods, which shares every assumption, as the robust part.