Debt Payoff Calculator
Compare debt payoff strategies and see your path to becoming debt-free. Snowball vs Avalanche - which works best for you?
Debt Payoff Methods
Debt Payoff Strategies
Getting out of debt requires a plan. The two most popular strategies—debt snowball and debt avalanche—both work, but they approach payoff differently. Understanding both helps you choose the method that fits your psychology and financial goals.
Our calculator compares both methods side-by-side, showing you which saves more money and which gets you quick wins faster.
Snowball Method
Pay smallest balances first for psychological wins.
Avalanche Method
Pay highest interest first to minimize total cost.
Side-by-Side Compare
See exactly how much each method costs.
Payoff Timeline
Know exactly when you'll be debt-free.
The Debt Snowball Method
The snowball method, popularized by Dave Ramsey, focuses on quick wins to build momentum. You pay minimum payments on all debts, then put extra money toward the smallest balance.
List All Debts
Write down every debt from smallest balance to largest, regardless of interest rate. Only the balance matters for ordering.
Pay Minimums on All
Make minimum payments on every debt to stay current. Never skip a payment—this protects your credit and avoids late fees.
Attack the Smallest
Put every extra dollar toward the smallest debt. Cut expenses, sell stuff, work extra—throw it all at this debt.
Roll the Payments
When the smallest debt is paid off, take its minimum payment plus your extra payment and add it to the next smallest. Your payment 'snowballs' larger with each debt eliminated.
The Debt Avalanche Method
The avalanche method is mathematically optimal—it minimizes total interest paid by targeting the highest-rate debts first.
Order by Interest Rate
List debts from highest interest rate to lowest. A credit card at 24% comes before a car loan at 6%, regardless of balance.
Pay Minimums on All
Same as snowball—make every minimum payment to stay current on all debts.
Attack the Highest Rate
Put all extra money toward the debt with the highest interest rate. This saves the most money over time.
Roll to the Next
When the highest-rate debt is paid, roll that payment to the next highest rate. Same snowball effect, different order.
Snowball vs Avalanche Comparison
Which method is better? It depends on whether you prioritize psychology or math.
| Factor | Snowball | Avalanche | Winner |
|---|---|---|---|
| Total Interest Paid | Higher | Lower | Avalanche |
| Time to First Win | Faster | Slower | Snowball |
| Motivation | High (quick wins) | Requires discipline | Snowball |
| Mathematical Optimum | No | Yes | Avalanche |
| Completion Rate | Higher | Lower | Snowball |
| Best For | Most people | Disciplined savers | Depends |
Making Extra Payments Count
Both methods work best with extra payments. Here's how to find more money to accelerate your debt payoff.
Cut Subscriptions
Cancel unused streaming, gym memberships, and subscription boxes. Even $50/month extra pays off $600 of debt per year plus interest saved.
Reduce Dining Out
Restaurant meals cost 3-5x home cooking. Cutting dining from $400/month to $100 frees up $300 for debt.
Side Hustle Income
Freelancing, gig work, or selling items can add hundreds monthly. Dedicate 100% of side income to debt.
Use Windfalls
Tax refunds, bonuses, gifts—put them all toward debt. A $3,000 tax refund can eliminate a credit card.
Negotiate Bills
Call insurance, phone, and internet providers. A $30/month savings equals $360/year toward debt.
Sell Unused Items
Electronics, clothes, furniture you don't need. One good garage sale or eBay spree can pay off a small debt entirely.
When to Consider Other Options
Sometimes debt payoff strategies alone aren't enough. Consider these alternatives if you're overwhelmed.
Balance Transfer Cards
0% APR promotional cards can save significant interest. Transfer high-rate balances and pay aggressively during the promo period. Watch for transfer fees (typically 3-5%).
Debt Consolidation Loan
A personal loan at a lower rate than your current debts simplifies payments and can reduce interest. Only works if you don't rack up new debt.
Negotiate with Creditors
If you're struggling, call creditors. They may lower interest rates, waive fees, or create hardship plans. Better to ask than to default.
Credit Counseling
Nonprofit credit counseling agencies can negotiate with creditors and set up debt management plans. Avoid for-profit 'debt settlement' companies.
Frequently Asked Questions
Which method pays off debt faster?
Both take the same time IF you stick with them. The avalanche saves more interest, so you're debt-free slightly faster. However, snowball has higher completion rates because quick wins keep people motivated. The fastest method is the one you'll actually follow.
Should I save while paying off debt?
Yes—keep a small emergency fund ($1,000-$2,000) while paying off debt. Without this buffer, emergencies force you back into debt. Once high-interest debt is gone, build a full 3-6 month emergency fund.
What about my mortgage?
Most experts exclude mortgages from aggressive payoff plans. Mortgage rates are typically low (3-7%), and the interest is often tax-deductible. Focus on high-interest debt first. Pay extra on your mortgage only after other debts are cleared.
Should I stop contributing to retirement to pay off debt?
Usually no. If your employer matches 401(k) contributions, contribute enough to get the full match—that's a 50-100% instant return. But beyond the match, pause extra retirement contributions until high-interest debt is paid.
Does it matter if I pay extra at the beginning or end of the month?
Interest accrues daily, so paying earlier in the month saves slightly more interest. But the difference is small—consistency matters more than timing. Pay whenever works for your cash flow.
What's a good extra payment amount?
As much as you can sustainably afford. Even $50/month extra makes a difference. The key is consistency—a steady $100/month beats sporadic $500 payments. Calculate what you can realistically commit to.
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