Calculators & Finance

Debt Payoff Calculator

Snowball against avalanche, with the real cost of each.

What it does. Avalanche pays the highest interest rate first and always costs less. Snowball pays the smallest balance first and produces a cleared debt sooner, which people are measurably more likely to sustain. The right answer depends on whether the gap is large enough to matter.

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How to use Debt Payoff Calculator

Add each debt with its balance, rate and minimum payment.
Set what you can pay in total each month.
Compare the two methods side by side.

The two methods

Avalanche: pay minimums on everything, put every spare pound at the highest interest rate. Mathematically optimal — it always costs less and usually finishes sooner.

Snowball: pay minimums on everything, put every spare pound at the smallest balance. Costs more, but clears an entire debt sooner, which is the point.

The research is more supportive of snowball than the arithmetic suggests. Studies of real repayment behaviour find that people who clear a debt early are more likely to keep going, and a plan sustained beats an optimal plan abandoned.

How to choose

Run both here and look at the gap. If avalanche saves a few hundred over three years, take whichever you will actually stick to. If it saves several thousand, the arithmetic deserves more weight.

The gap is widest when rates differ a lot and balances do not — a large low-rate loan alongside a small high-rate card is the case where snowball is genuinely expensive.

A hybrid is legitimate: clear one small debt for the momentum, then switch to avalanche. Nothing requires committing to a method for the whole journey.

Before either method

Stop adding to it. No plan survives continued borrowing.
Keep a small buffer. Without one, the next surprise goes back on the card.
Ask for a lower rate. A phone call sometimes works and costs nothing.
Check balance-transfer offers, including the fee in the comparison.
Pay more than the minimum, which is set to maximise interest paid.

That last point is worth being blunt about. Paying only the minimum on a typical credit card balance can take decades and cost more in interest than the original amount borrowed. The minimum is designed for the lender, not for you.

Frequently asked questions

Is snowball or avalanche better?

Avalanche always costs less. Snowball clears a debt sooner, and research on real behaviour finds people are more likely to keep going. Run both — if the gap is small, take whichever you will sustain.

When does the choice matter most?

When rates differ a lot but balances do not. A small high-rate card alongside a large low-rate loan is the case where snowball is genuinely expensive.

Should I save or pay off debt first?

Usually a small buffer of around one month first, then high-interest debt, then the full emergency fund. Without any buffer the next unexpected bill goes straight back onto the card.

What happens if I only pay the minimum?

On a typical credit card it can take decades and cost more in interest than you originally borrowed. Minimum payments are calculated to be sustainable for the lender, not efficient for you.

Are balance transfers worth it?

Often, if you include the transfer fee in the comparison and can clear the balance within the promotional period. If you cannot, the rate after it ends may leave you worse off.