Debt Payoff Calculator

How to use the debt payoff calculator

List up to four debts — credit cards, car loans, personal loans, student loans or medical bills — with each one's current balance, interest rate and minimum monthly payment. Leave a balance at zero to skip a row. Then enter the extra amount you can put toward debt each month on top of the minimums, and pick a strategy.

The calculator builds a month-by-month plan and shows your debt-free date, the total interest you will pay, the order in which each debt is cleared and how the alternative strategy compares. The chart tracks your total remaining debt under both methods.

Snowball vs avalanche: how each method works

Both methods use the same total monthly budget and the same core rule: pay the minimum on every debt, then put every remaining dollar toward one target debt. When the target is paid off, its minimum payment "rolls over" to the next target, so the amount attacking your debt grows as you go. The only difference is the order:

• Debt avalanche — target the debt with the highest interest rate first. This minimises total interest and is usually the fastest route.
• Debt snowball — target the debt with the smallest starting balance first. You clear whole accounts sooner, which many people find motivating.

Worked example

Suppose you owe four debts totalling $25,500: a credit card with $5,000 at 24% (minimum $150), a second card with $2,500 at 19% ($75), a car loan of $12,000 at 7% ($300) and a personal loan of $6,000 at 11% ($200). The minimums add up to $725, and you can add $300 extra, for a budget of $1,025 a month.

The avalanche saves about $124, while the snowball gives you your first paid-off account five months sooner. Here the gap is small because the two cards have similar rates; with a large high-rate balance, the avalanche advantage can run to thousands. Either way, the extra $300 is what really matters: without it, the same debts take 3 years 9 months and cost about $6,806 in interest.

Which strategy should you choose?

If you are confident you will stick with the plan, the avalanche is mathematically optimal. If you have tried and stalled before, or have several small balances, the quick wins of the snowball can keep you going — research on consumer behaviour suggests that closing accounts helps people persist. Some people use a hybrid: knock out one or two tiny balances first, then switch to the avalanche.

Tips to become debt-free faster

• Stop adding new debt. Put cards away while you repay them; new spending undoes the plan.
• Keep a small emergency buffer so a surprise bill does not go back on a card. The emergency fund calculator helps you size it.
• Lower your rates. A 0% balance transfer or a cheaper consolidation loan can cut interest, as long as fees are lower than the savings.
• Increase the extra payment whenever you get a raise, bonus or tax refund. Even small increases shorten the plan.
• Track one card at a time with the credit card payoff calculator, and review your whole budget with the budget calculator.

The plan assumes fixed interest rates, no new charges and that minimum payments stay the same; real statements may differ slightly. This is an estimate, not financial advice.