Money
Debt payoff calculator: snowball vs avalanche
Avalanche (highest interest rate first) costs less; snowball (smallest balance first) gives quicker wins. On our four-debt example, avalanche saves $349 of interest.
Snowball vs avalanche: a worked example
Four debts, paying the minimums plus $200 a month extra ($760 in all). The last two columns show the month each debt is paid off.
| Debt | Balance | APR | Minimum | Snowball | Avalanche |
|---|---|---|---|---|---|
| Medical bill | $1,200 | 0% | $50 | 5 | 24 |
| Store card | $2,500 | 27% | $75 | 13 | 11 |
| Visa | $7,000 | 22% | $175 | 28 | 27 |
| Car loan | $9,500 | 7% | $260 | 33 | 32 |
Avalanche costs $3,827 in interest against $4,176 for snowball, a saving of $349; both finish in about 2 years, 9 months. Snowball clears the medical bill in month 5, the quick win that keeps many people going.
Citing this? Link to https://tools.tidyandtended.com/debt-payoff/. Simulated month by month by our calculator. Free to reuse with a link (CC BY 4.0).
How the calculator works
Each month it adds interest (balance × APR ÷ 12), pays every minimum, then puts all the money left over on the target debt: the smallest balance for snowball, the highest APR for avalanche. When a debt is paid off, its minimum rolls into the next one. Credit cards charge interest daily, so real statements can differ by a few dollars.
Questions
What is the difference between the debt snowball and avalanche?
Snowball pays the smallest balance first for quick wins; avalanche pays the highest interest rate first, which costs less. In our example avalanche saves $349 of interest.
Which is better, snowball or avalanche?
Avalanche always costs the same or less in interest. Snowball can be better if quick wins keep you paying; the best plan is the one you stick with.
How long will it take to pay off my credit card?
A $5,000 balance at 22% APR takes 2 years, 10 months at $200 a month, with $1,750 of interest. Use the “One debt” tab for yours.
What payment pays off a card in two years?
For $5,000 at 22% APR, about $259 a month for 24 months.
Why isn’t my balance going down?
If your payment is close to the monthly interest, most of it goes to interest. The calculator warns you when a payment doesn’t cover the interest at all.
Should I save or pay off debt first?
Many planners suggest a small emergency fund first, so a surprise bill doesn’t go back on a card, then attacking high-interest debt.
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