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Debt payoff calculator: snowball vs avalanche

Add each debt with its balance, interest rate and minimum payment, then the total you can pay each month. The calculator runs both methods month by month and compares them.

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%
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smallest balance first

Snowball

Debt-free in32 months (2 yrs 8 mo)
Interest paid$2,137.91
  1. Store card paid off in month 6
  2. Visa paid off in month 24
  3. Car loan paid off in month 32
highest rate first

Avalanche

Debt-free in32 months (2 yrs 8 mo)
Interest paid$2,060.25
  1. Visa paid off in month 23
  2. Store card paid off in month 24
  3. Car loan paid off in month 32

The avalanche saves you $77.66 in interest. The snowball clears your first debt in month 6, against month 23 with the avalanche. Paying only the minimums: 82 months (6 yrs 10 mo) and $5,483.48 in interest.

The full guideDebt snowball vs debt avalanche: which payoff method works?

Snowball or avalanche?

Both methods pay the minimum on every debt and put every extra dollar on one target. When a debt is paid off, its minimum is added to the next target, which is why payments speed up over time.

  • Snowball: the smallest balance first. You close accounts sooner, which keeps motivation up.
  • Avalanche: the highest interest rate first. It costs less interest, sometimes a lot less when the rates are far apart.

What the research says

In a study of 5,943 clients of a debt-settlement firm, Gal and McShane (Journal of Marketing Research, 2012) found that closing individual accounts predicted getting fully out of debt, whatever the size of those accounts. That's the argument for the snowball. On the other side, Gathergood and colleagues (American Economic Review, 2019) showed with UK card data that people tend to spread payments in proportion to balances instead of targeting the most expensive card, which costs them money. The avalanche fixes exactly that.

The honest answer: pick the avalanche if the gap in interest is large, and the snowball if you've given up on repayment plans before. Either beats paying only the minimums.

How this calculator works

Each month, interest is added to each balance (annual rate ÷ 12), the minimums are paid, then the rest of your budget goes to the target debt. It's a simplified model: real lenders may compound daily, charge fees or change rates. Treat the results as an estimate and check the figures on your statements.

Read the full guide: debt snowball vs debt avalanche.

If you're struggling

Free, non-profit help exists: in the US, the CFPB and NFCC-member credit counsellors; in the UK, StepChange and National Debtline. The FTC warns that only scammers guarantee to settle your debts, and that debt-relief companies can't charge upfront fees.

Frequently asked questions

Which method saves the most money?

The avalanche, almost always, because the most expensive debt shrinks first. The gap depends on how different your interest rates are; the calculator shows it for your own debts.

What if my budget is lower than the total of the minimums?

Neither method works then. Contact your lenders before missing a payment, and get free debt advice from a non-profit service.

Should I include my mortgage?

Usually not. The methods are meant for consumer debts: cards, overdrafts, personal and store loans.

Put it into practice

Say it once. Binome360 keeps the record.

A sentence, a voice note or a receipt photo: the assistant prepares the record in the right space, you confirm. 7 days free.

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