Debt Payoff Calculator

The avalanche methoddirects extra payments to the debt with the highest interest rate first, while making minimum payments on everything else. Once that debt is paid off, the freed-up payment rolls to the next highest rate. This minimizes total interest paid—it is mathematically optimal.

The snowball methodtargets the smallest balance first, regardless of interest rate. You get faster “wins” as small debts disappear, which research shows helps people stay motivated. Dave Ramsey popularized this approach for a reason—behavior matters more than math if it keeps you from quitting.

When Avalanche Wins

Avalanche saves the most money when there is a wide spread between your highest and lowest interest rates. A 24% credit card vs. a 5% car loan is an obvious avalanche case—every dollar on the credit card saves nearly 5x as much interest.

When Snowball Wins

When interest rates across debts are similar (e.g., all credit cards in the 18–22% range), the interest cost difference is small. In that case, the psychological benefit of eliminating a debt quickly can be worth more than the few dollars saved by avalanche. The snowball is also better when you have a small debt you can knock out in 1–2 months to build momentum.

Tips for Both Strategies

• Always pay at least the minimum on every debt to avoid penalties and credit damage.
• Automate payments so you never miss one.
• Redirect freed-up payments immediately when a debt is paid off—don’t absorb the cash into spending.
• Consider a balance transfer (0% intro APR) or debt consolidation loan if it lowers your effective rate. Factor in transfer fees (typically 3–5%).
• Build a small emergency fund ($1,000–$2,000) before aggressively paying down debt. Without a buffer, an unexpected expense can force you back into debt.