Debt payoff calculator
List your debts, add an extra payment, see when you will be debt-free.
Snowball or avalanche: what is the difference?
Both come from the CFPB’s “Your Money, Your Goals” toolkit (Tool 3, Reducing debt worksheet). The avalanche — the CFPB calls it the highest interest rate method — puts every spare dollar on the debt with the highest APR, which usually costs the least interest. The snowball goes after the smallest balance first, so the first debt disappears sooner; the CFPB notes it may cost more in total.
How does the calculator work it out?
Each month every debt is charged balance × APR ÷ 12 of interest. You pay the minimum on every debt, and the rest of your budget (the minimums plus the extra amount) goes to the first debt in line. When a debt is paid off, its minimum rolls into the next one, so the total you pay each month stays the same until you are debt-free.
Example
A store card with $900 at 18% ($30 minimum), a Visa with $4,800 at 24% ($120 minimum) and a car loan with $9,500 at 7% ($260 minimum), plus $200 extra — $610 a month in all. Avalanche: debt-free in 29 months with $2,192.46 of interest. Snowball: also 29 months, but $2,268.29 of interest — $75.83 more.
What if my payments never pay it off?
If the total you pay each month is not more than the interest being added, the balances never go down. The calculator says so; raise the extra amount until the total covers the interest with room to spare.
Why might my lender’s numbers differ?
Card issuers usually charge interest daily on the average daily balance, minimum payments often shrink as the balance falls, and new charges or fees add to the balance. The calculator assumes fixed minimums, no new charges and APR ÷ 12 each month.
How much does an extra payment save?
On the three sample debts above, paying only the minimums (each paid-off debt’s minimum still rolls over) takes 50 months and costs $5,275.76 in interest. Adding $200 a month shortens it to 29 months and $2,192.46, which is $3,083.29 less. The extra amount works twice: it clears the balance sooner and it stops the interest on that balance.
Should I pay off a 0% or low-rate debt early?
Usually not before higher-rate debts. Interest is charged on each balance at its own APR, so a dollar sent to a 24% card avoids more interest than a dollar sent to a 7% loan. The exceptions are practical: a debt with a prepayment penalty, or a promotional rate that jumps on a known date, can change the order. Use the minimum on every debt either way, since a missed payment brings fees and may hurt your credit.
The two orderings step by step
Every month the calculator first adds interest to each open debt (balance × APR ÷ 12), then pays the minimum on every debt, and puts whatever is left of your fixed monthly budget on the first debt in the chosen order. In the sample the monthly budget is $410 in minimums plus $200 extra, and it stays $610 until the last debt is gone. When the store card is paid, its $30 minimum is not spent elsewhere; it joins the extra. That rollover is what makes both methods faster than paying each debt separately. The only difference between them is which debt receives the leftover first: highest APR for the avalanche, smallest balance for the snowball.
Worked example: where the first dollars go
In the first month the three debts accrue $164.92 of interest in total: $13.50 on the store card, $96.00 on the Visa and $55.42 on the car loan. Of the $610 budget, $410 covers the minimums; the other $200 goes to the Visa under the avalanche (24%) but to the store card under the snowball (smallest balance). The snowball therefore clears its first debt sooner, in a month the output shows, while the avalanche clears the Visa first and ends $75.83 cheaper: $2,192.46 of interest against $2,268.29.
Common mistakes
Entering an APR as a monthly rate, or leaving a minimum at zero, makes a plan look better than it is. The calculator also assumes no new charges: add a purchase to a card you are paying off and the plan no longer holds. Minimums on real cards usually fall as the balance falls, but the model keeps them fixed, which is a deliberate choice, because it keeps your monthly outlay constant and avoids a payoff that slows down. If your total payments barely exceed the monthly interest, a small rise in any rate can push the payoff date out by years, so leave some slack.
Estimates for planning only — not financial advice. Your lender's figures decide. How we check our calculators.
Sources: Consumer Financial Protection Bureau, “Your Money, Your Goals” financial empowerment toolkit, Tool 3 (reducing debt worksheet), for the highest-interest-rate and smallest-balance methods; interest accrual as APR ÷ 12 per month follows the usual amortization convention (see the loan payoff calculator). Related: credit card payoff calculator, debt-to-income ratio calculator, loan comparison calculator and budget calculator.