๐ณ Debt Payoff Calculator
Enter multiple debts (balance, interest rate, minimum payment), a monthly extra payment amount, and a payoff strategy (avalanche or snowball), and this tool simulates how long it will take to become debt-free and the total interest you'll pay. The avalanche method pays off the highest-interest debt first; the snowball method pays off the smallest balance first. Handy for planning a payoff strategy across multiple credit cards or loans.
How to use
- Enter a name, balance, interest rate (APR), and minimum payment for each debt.
- Enter your monthly extra payment (the amount you add on top of the minimum payments).
- Choose a payoff strategy (avalanche or snowball) โ the time to debt-free and total interest are calculated automatically.
How the calculation works
This tool works out, month by month, how long it takes to pay off several debts and how much interest you pay in total using the avalanche or snowball method. The monthly payment is fixed at the sum of all minimum payments plus the extra payment. Each month, interest of "annual rate รท 12" is added to each balance, the minimum is paid on each debt, and whatever money is left goes to the highest-priority debt. Priority is the highest interest rate first for the avalanche method and the smallest balance first for the snowball method. When a debt is paid off, its minimum payment is rolled into paying the next one, so the payment on the priority debt grows as each debt is cleared. If payoff takes more than 600 months (50 years), the result is shown as out of range.
Worked example
Debt A: balance ยฅ300,000, 8% APR, minimum ยฅ10,000 Debt B: balance ยฅ500,000, 15% APR, minimum ยฅ15,000 Extra payment: ยฅ20,000 (monthly payment ยฅ45,000) Avalanche (pay B, the higher rate, first) Paid off in 20 months, total interest about ยฅ82,143 Snowball (pay A, the smaller balance, first) Paid off in 20 months, total interest about ยฅ98,013 In this example, paying down the higher-rate debt first saves about ยฅ16,000 in interest.
Things to be aware of
- If a debt's minimum payment is smaller than its monthly interest, its balance grows instead of shrinking. If payoff exceeds 600 months, raise the payments.
- Real card loans and revolving credit often charge daily interest or adjust the minimum payment to the balance, so treat the results as estimates.
- If repayments are becoming unmanageable, seek help early from a debt advice service or consumer affairs centre.
FAQ
What's the difference between avalanche and snowball?
The avalanche method directs extra payments to the highest-interest debt first, minimizing total interest mathematically. The snowball method pays off the smallest balance first, giving you quick wins that can be easier to stick with psychologically.
Which method results in a lower total cost?
The avalanche method generally results in less total interest paid, though the difference varies by case โ many people still choose snowball for the motivational benefit of paying off debts faster.
What happens if I set the extra payment to 0?
You'll see the simulation for paying only the minimum on each debt. If the payoff time is extremely long, you may see a "calculation range exceeded" message.