How the calculator pays your debts off
You give it every debt with its balance, interest rate and minimum payment, plus the extra amount you can pay each month. Your total monthly payment is then fixed at all the minimums plus the extra. Each month:
- Interest (the yearly rate divided by 12) is added to every balance.
- Every debt gets its minimum payment.
- All the money that is left goes to one target debt. The snowball picks the smallest balance, and the avalanche picks the highest rate.
- When a debt reaches zero, its minimum stays in the pot and rolls onto the next target. This rollover is what makes both methods fast.
The "minimums only" plan is the baseline. Each debt is paid on its own with just its minimum, nothing extra and nothing rolled over.
Worked example: four debts, $22,400 in all
A person has a $3,500 card at 24.99%, an $8,200 card at 19.99%, a $1,200 store card at 29.99% and a $9,500 car loan at 7.5%. The minimums add up to $595 a month, and they can add $200, so they pay $795 every month until it is done.
| Plan | Debt-free after | Total interest | Saved vs minimums |
|---|---|---|---|
| Minimums only | 6 years, 5 months | $11,295 | - |
| Snowball | 3 years | $5,757 | $5,538 |
| Avalanche | 2 years, 11 months | $5,297 | $5,998 |
Paying $200 extra saves about $5,998 of interest and takes off roughly 3.5 years. The gap between the two methods is much smaller: the avalanche costs $460 less than the snowball. The table below shows the month each debt reaches zero.
| Debt | Snowball | Avalanche | Minimums |
|---|---|---|---|
| Debt 1: $3,500 at 24.99% | Month 17 | Month 17 | Month 58 |
| Debt 2: $8,200 at 19.99% | Month 36 | Month 32 | Month 77 |
| Debt 3: $1,200 at 29.99% | Month 6 | Month 6 | Month 57 |
| Debt 4: $9,500 at 7.5% | Month 27 | Month 35 | Month 42 |
Both methods clear the $1,200 store card first, in month 6, because it is both the smallest and the most expensive. They then split. The snowball moves to the $3,500 card, then the car loan, and leaves the 19.99% card for last. The avalanche goes after the 19.99% card before the 7.5% car loan, so it clears the 19.99% card in month 32 instead of month 36.
Snowball or avalanche: how to choose
- If your rates are all similar, the two methods finish almost together. Pick whichever you will stick with.
- If one big debt has a much higher rate, the avalanche saves the most.
- If you keep giving up, the snowball's early wins can help. A plan you drop is worth nothing.
- Either way, the biggest savings come from the extra payment itself, as the table above shows.
Other ways to lower the cost
- Ask for a lower rate. A phone call to a card issuer sometimes works, and every point off a high rate helps.
- Compare a balance transfer or consolidation loan on total cost. Count the fee and what happens when a promotional rate ends. Use the loan calculator to test a consolidation loan.
- Stop adding new debt. The calculator assumes the balances only go down.
- Look at one card alone. The credit card payoff calculator goes deeper on a single balance.
What this calculator leaves out
- New charges and fees. Late fees, annual fees and new purchases are not included.
- Changing rates. It uses one rate per debt for the whole time. Variable and promotional rates change.
- Shrinking minimums. Many cards lower the minimum as the balance falls. We keep your minimum fixed, so the "minimums only" plan here pays off faster than it may in real life.
- Daily interest. Cards usually work out interest daily. We use one twelfth of the yearly rate each month, which is very close.
This is a planning tool, not financial advice. If you are behind on payments or debts are in collections, a nonprofit credit counselor can help you set up a plan. Check where you stand with the debt-to-income ratio calculator.
Sources and review
The monthly interest and payment steps are the standard loan amortization arithmetic, and a single debt gives exactly the same answer as our single-debt payoff calculation in the tests. Every article figure above is computed with the calculator's own function. From the Consumer Financial Protection Bureau: many card issuers calculate interest daily on the average daily balance (how card interest is calculated), and consolidating credit card debt covers balance transfers and consolidation loans, and recommends free support from a nonprofit credit counselor and asking creditors about lower payments or rates. Card statements must also show how long minimum-only payments would take (the minimum payment warning on your statement). Last reviewed September 2026. Read about our methodology.