Paying off debt is a sequencing problem. You already owe the minimums. The extra money you can add each month has to go somewhere, and the order changes how much interest you pay and how fast an account disappears.
Avalanche spends the extra dollar where it hurts most
Both methods pay the minimum on every debt, then send every extra dollar to one focus debt. Avalanche focuses on the highest interest rate. That usually costs less, because interest is the price of the balance and the highest price gets cut first.
When a debt is gone, its minimum joins the extra payment on the next debt. That roll-forward is why a plan that feels slow at the start speeds up. The payoff date and the interest total are the two numbers to compare.
Snowball buys a finished account
Snowball focuses on the smallest balance. It does not minimize interest. It removes a bill, which some people stick with longer. Use it when a quick win is what keeps the plan alive, and check how much extra interest that choice costs.
With a large extra payment, both methods can finish in the same month. The interest totals can still differ. If the gap is small, pick the method you will follow. If the gap is large, the math is asking you to start with the expensive debt.
The plan breaks if the balance keeps growing
New charges on a card you are trying to pay off are not in this schedule. The dates assume the balances only fall. Stop adding to the focus account, or the chart is a wish.
Minimums alone can leave a high-rate card in debt for many years. Any amount above the minimums shortens that. A mortgage often should not outrank a card, because the card’s rate is usually much higher. Leave the low-rate mortgage out if attacking it would slow down the expensive debt.
How to use the debt payoff planner calculator
Both methods pay the minimum on every debt, then send every extra dollar to one focus debt. Avalanche focuses on the highest APR, which usually costs less in interest. Snowball focuses on the smallest balance, which clears an account sooner. When a debt is gone, its minimum joins the extra payment on the next debt.
- List each card and loan with its balance, APR, and minimum payment.
- Add the extra cash you can put toward debt each month, beyond those minimums.
- Switch between avalanche and snowball to see the interest and the payoff order.
- Watch the debt-free date. That is the number the extra payment is buying.
How the math works
Avalanche
Interest is the price of the balance. Attacking the highest rate first cuts that price fastest. The payoff date and the interest total are the two numbers to compare.
Snowball
Paying the smallest balance first does not minimize interest. It removes a bill, which some people stick with longer. Use it if a quick win is what keeps the plan alive, and check how much extra interest it costs.
The extra payment
Minimums alone can leave high-rate cards in debt for many years. The extra amount is applied after minimums, and it rolls forward as each account is paid off.
Four debts and $250 extra
The defaults include a $8,400 card at 23.9%, a $3,200 card at 19.2%, a $14,200 auto loan at 6.4%, and a $19,600 student loan at 5.1%, plus $250 a month beyond the minimums.
Either method is debt-free in about 49 months. Avalanche charges about $7,950 of interest. Snowball charges about $8,225. The interest gap is about $275 on this mix because the extra payment is already large.
Terms worth knowing
- Avalanche
- Pay minimums, then put extra money toward the highest interest rate.
- Snowball
- Pay minimums, then put extra money toward the smallest balance.
- Minimum payment
- The amount the lender requires. Paying only that keeps the debt around much longer.
- APR
- The yearly interest rate on that debt. Cards are usually much higher than auto and student loans.
What to do with the number
Stop adding new charges to a card you are trying to pay off. Otherwise the balance does not follow this schedule.
If two methods finish in the same month, pick the one with less interest.
A 0% balance-transfer offer can beat both methods if you clear the balance before the promotional rate ends. The fee matters.
Put windfalls on the focus debt. The chart assumes the extra payment never changes.
Questions people ask
What this leaves out
Rates stay fixed. New purchases are not added.
Minimums stay at the dollar amount you entered, even as balances fall.
Extra money arrives every month.
The projection stops at 50 years if the minimums cannot cover the interest.
These figures are estimates to help you understand the tradeoff. They are not tax, legal, insurance, or investment advice. A fiduciary can look at the same numbers in the context of the rest of your plan.