Debt Payoff Planner

How this is calculated

Both plans run the same month-by-month simulation; only the targeting order differs:

• Interest — each debt accrues one month of interest: balance × APR ÷ 12.
• Minimums — every debt then receives its minimum payment (never more than what's owed).
• The extra — whatever remains of your budget goes to one target debt: the smallest balance (snowball) or the highest APR (avalanche).
• Rollover — when a debt is finished, its freed minimum automatically joins the extra from the next month on. Your total monthly outlay never changes.

Total interest is the sum of every month's accruals; the debt-free date counts months from today. If the budget doesn't cover the minimum payments, the planner says so rather than showing a plan that can't happen — and if the payments can't outrun the interest at all, it tells you that too. Balances are assumed fixed (no new charges), and APRs constant.

Snowball vs. avalanche: what actually differs, and by how much

Every serious debt-payoff plan is the same machine: pay every minimum, then concentrate every spare dollar on one debt until it dies, then roll that debt's payment into the next target. The only decision is the order of execution — and the two famous answers optimize for different things.

The avalanche targets the highest interest rate first. This is the mathematically cheapest order: a dollar of balance at 24% costs four times what a dollar at 6% costs each month it survives, so killing expensive balances first means fewer expensive dollars surviving. The snowball targets the smallest balance first. It concedes some interest in exchange for speed of visible progress — the first paid-off account arrives as early as possible, and each closed account frees a minimum payment and a mental line item.

A worked example

Take the pre-filled scenario: a $1,500 store card at 9%, a $7,000 credit card at 24%, an $11,000 car loan at 6%, minimums of $470 total, and a $700 monthly budget. Snowball clears the store card first (month 6) and pays about $3,226 of interest over 33 months. Avalanche goes after the credit card first (gone in month 20) and pays about $2,930 — $296 less, with the same debt-free date. That gap is real money, but notice it's also about nine dollars a month; the choice is worth making deliberately, not agonizing over.

The gap isn't always small. It widens when the rate spread is wide, the balances are large, and the extra budget is thin — a big 29% card paid last instead of first can cost thousands. Type your own numbers in; the tool prices the difference exactly.

Why the payoff date barely moves

People expect the "better" method to finish much faster, but with a fixed total budget, the debt-free date is driven almost entirely by how much money you throw at the pile each month, not the order you throw it in. Order mostly redistributes interest. The lever that actually moves the date is the budget itself: even $50 more a month often shaves several months off the plan — the tool will show you.

Common traps

Minimum payments are designed to keep a balance alive, not to kill it — on a high-rate card, minimums alone can take decades. Watch for a minimum that doesn't even cover the month's interest: that balance grows, and this planner will refuse to pretend otherwise. New charges are the silent plan-killer; a payoff plan assumes the balances only go down. And consolidation, balance transfers, or hardship programs change the debts themselves — sometimes usefully — but they're a different decision than the ordering this page compares.