Debt Payoff Calculator

Every month each debt is charged its own rate divided by twelve, then its minimum is paid. The extra payment goes entirely to the first debt in the queue, and when a debt clears, its minimum joins the extra - that rolling payment is the snowball part, and both methods use it. The only difference between the two methods is the order of the queue: avalanche sorts by highest interest rate, snowball by smallest balance.

Is snowball or avalanche better?

Avalanche always costs less in interest, because it kills the most expensive debt first. Snowball clears the first debt sooner, which is why people stick with it. If the gap above is small, take snowball; if it is thousands, take avalanche.

What is the rolling payment?

When one debt clears, you keep paying the same total every month and send the freed-up minimum to the next debt. That is what makes the last debts fall so fast, and it is why the total stays flat while the payoff accelerates.

Should I consolidate instead?

Consolidation helps only if the new rate is genuinely lower and you do not run the cleared cards back up. Compare the consolidation offer against the avalanche interest above, and include any origination fee.

What about a balance transfer card?

A 0 percent transfer window is the cheapest option if you can clear the balance before it ends. Take the balance, divide by the number of promotional months, and only do it if you can genuinely pay that much each month, since the back rate is usually above 20 percent.

Should I save or pay off debt first?

Keep a small emergency fund of around 1,000 first, so a flat tire does not put you back on the card. After that, any debt above roughly 6 to 8 percent is worth clearing before extra investing.