Debt Snowball Calculator

Order your debts from smallest balance to largest, disregarding the interest rates. Pay the minimum on every one of them, and direct all spare money at the smallest. When that debt clears, nothing leaves your budget. Its minimum plus the extra you were adding both roll into the next debt on the list, on top of the minimum you were already paying there. Clear that one and the whole combined amount rolls again. Your monthly outlay stays flat from the first month to the last, while the amount landing on the current target grows at every payoff. That is the mechanism the name describes, and it is what the model on this page implements: a constant monthly budget equal to the sum of your minimums plus the extra, applied in that order until every balance reaches zero. The acceleration is real but it is worth naming its source precisely. The snowball does not create money. It concentrates a fixed amount rather than spreading it, and concentration is what shortens payoff dates.

The avalanche method is the same rollover mechanism ordered by APR instead of balance, highest rate first. It is arithmetically optimal: for a given monthly budget it always produces the lowest total interest and the earliest final payoff date. There is no set of inputs where the snowball beats it on cost. The snowball trades some of that for a different property: the first debt disappears sooner, because small balances clear quickly regardless of rate. Its case is behavioural — that a plan producing early, visible completions is more likely to be sustained than one where the first payoff may be a year or more away. Research on borrower behaviour has been cited in support of that claim, though how much it applies to any individual is not something a calculator can determine. So the comparison is: avalanche wins on money, snowball wins on early feedback, and a plan abandoned in month five saves nothing. The gap between them is usually small when the debts are similar in size and rate, and large when the biggest balance also carries the highest rate. One way to decide with real numbers: run this page as-is, then re-enter the same debts with the balances reordered so that the highest-rate debt is the smallest figure, and compare the total interest. If the difference is trivial, the choice is genuinely yours. If it is not, you now know what the momentum is costing.

The output is only as good as the three numbers per debt, and two of them are commonly entered wrong. The minimum payment should be the amount the lender currently requires — from the statement, not an estimate. Note that this model holds each minimum constant for the whole plan. Real credit card minimums are typically calculated as a percentage of the balance and therefore shrink as the balance falls, which means an actual snowball frees up slightly less than modeled and pays slightly more interest. The direction of the error is small and predictable, and it disappears entirely if you simply keep paying the original amount rather than the reduced one, which is what most people following this method do anyway. The APR must be the rate for that specific debt. A card carrying a promotional balance and a standard balance at different rates does not have one APR; if the difference is large, entering it as two separate debts is closer to the truth. As for what to list: the method targets consumer debt — credit cards, personal loans, car loans, and often student loans. A mortgage is usually excluded, both because its scale would dominate every other entry and because its rate is typically far below the rest of the list. Where a loan has income-driven repayment terms or forgiveness features, aggressive prepayment may forfeit something, so check the plan documents before including it.

The plan is only as strong as the extra payment, and the extra payment is the only field you fully control. Small increments matter more than they look. Raise the extra by a modest amount and watch the debt-free date move; the response is non-linear, because every month removed also removes the interest that month would have charged. Windfalls behave the same way and better: a tax refund or bonus applied to the current target does the work of many months of incremental extra, precisely because it lands early. What stops a snowball is new borrowing. The mechanism assumes the balances only fall, and a single new charge on a card being paid down resets progress at that card's rate. This is why building even a small cash buffer alongside repayment is worth considering rather than deferring — an unexpected expense with no cash behind it becomes new debt, and the snowball cannot outrun debt added faster than it clears. The calculator also flags a specific failure state: if your total budget barely exceeds the interest accruing across all debts, the balances never meaningfully fall and no payoff date exists. That result is not a bug. It is the model telling you that the plan needs a larger budget, a lower rate, or outside help before an ordering strategy is relevant at all.

Both methods assume the same thing: that your income covers the minimums with something left over. When it does not, choosing between them is the wrong question. There are documented routes in that situation. Nonprofit credit counseling agencies can review a full picture and, in some cases, arrange a repayment plan with creditors. Card issuers sometimes operate hardship programs that reduce a rate or restructure payments temporarily; asking is free and does not commit you. Consolidating high-rate revolving balances into a lower-rate installment loan is another structure, though approval and rate depend on credit and it only helps if the underlying spending has stopped. Be wary of anything charging a large upfront fee to make debt disappear, or promising results before doing any work. The CFPB publishes guidance on distinguishing legitimate debt relief from the rest, and on your rights when dealing with collectors. Finally, treat secured debt differently from the rest of the list. Where missing a payment risks repossession of a car or the loss of a home, that debt may warrant priority for reasons unrelated to its balance or its rate — and no ordering heuristic accounts for that. Terms vary by lender and by loan, so the agreement is the authority.