Debt Payoff Calculator
Compare the Snowball and Avalanche methods to find your fastest path out of debt.
Understanding Your Debt Payoff Options
Choosing the right strategy is key to getting out of debt efficiently. This tool compares two of the most effective methods to help you decide.
Debt Snowball Method
With this method, you focus on paying off your smallest debts first, regardless of their interest rates. The goal is to score quick wins to build momentum and motivation. Once the smallest debt is paid off, you roll that payment amount into the next-smallest debt, creating a "snowball" effect.
Debt Avalanche Method
This method prioritizes paying off your debts with the highest interest rates first. Mathematically, this is the most efficient approach, as it will save you the most money in interest payments over time. Once the highest-interest debt is gone, you apply its payment to the next-highest, and so on.
Frequently Asked Questions (FAQ)
Which method is better: snowball or avalanche?
The "best" method is subjective. The Avalanche method will always save you more money. However, the Snowball method can provide powerful psychological boosts that help people stay motivated. This calculator lets you see the hard numbers for both so you can make a choice that fits both your wallet and your personality.
What if I get a raise or have extra money one month?
That's great! Any extra money you can put toward your target debt (either the smallest balance or the highest interest rate) will accelerate your payoff timeline. The key is to be consistent with your minimum payments on all debts while aggressively paying down one at a time.