Debt Payoff Calculator: Avalanche vs Snowball
Enter your debts, set an extra monthly payment, and choose your strategy. The calculator runs the full month-by-month simulation for both the avalanche and snowball methods so you can see the difference in total interest and payoff time before you commit.
Payoff time (avalanche)
3y
Total interest paid
$2,409
Payoff order
Credit card → Car loan
Total balance over time
Payment schedule (yearly)
| Year | Cumul. interest | Balance |
|---|---|---|
| 1 | $1,427 | $9,527 |
| 2 | $2,214 | $4,914 |
| 3 | $2,409 | $0 |
How it works
Each month the calculator accrues interest on every open balance, applies the required minimum payment to each debt, then directs your extra monthly amount — plus any minimum payments freed by already-paid-off debts — toward a single target debt. As targets close, that freed cash automatically rolls over to the next one in the same month, compounding your momentum.
The avalanche method targets whichever open debt carries the highest annual percentage rate (APR), breaking ties by larger balance. Because interest accumulates fastest on high-rate debt, eliminating it first minimises the total interest you pay over the life of all your debts. Mathematically it is always the cheapest path.
The snowball method targets the open debt with the lowest balance, breaking ties by lower APR. Paying off a small balance quickly delivers a concrete win that can reinforce the habit of continuing. Research on behavioral economics suggests that for many people the motivation gained from early payoffs outweighs the slightly higher interest cost, helping them stay on plan.
Frequently asked questions
Which is better, avalanche or snowball?+
Mathematically the avalanche method always results in equal or lower total interest paid, because it eliminates the debt that is growing fastest first. The snowball method can cost more in interest but provides earlier motivational wins by closing accounts sooner. The best strategy is whichever one you will actually stick to — a snowball plan that you follow through beats an avalanche plan you abandon. Consider consulting a financial professional if you are unsure which fits your situation.
Should I pay off debt or invest instead?+
A useful rule of thumb: if your expected investment return (after tax) is higher than your debt's APR, investing may produce better long-term results. If your debt rate is higher — especially credit-card rates in the 18–25% range — paying down the debt first is effectively a guaranteed, risk-free return at that rate. Many advisors suggest building a small emergency fund first, then aggressively tackling high-interest debt before prioritising investments. Your specific tax situation, employer match on retirement accounts, and risk tolerance all matter, so professional advice is worthwhile for larger decisions.
Do extra payments hurt my credit score?+
No — paying more than the minimum never harms your credit score. Extra payments reduce your outstanding balances, which lowers your credit utilisation ratio, one of the largest factors in most scoring models. Completely paying off and closing old accounts can cause a minor, temporary dip because it affects average account age, but the lower balances typically outweigh this effect over time.