Debt Payoff Planner

The two debt payoff methods, in one sentence each

Both methods pay the minimum on every debt, then throw every spare dollar at one target debt. They differ only in which debt gets the spare money.

• Avalanche targets the highest interest rate first. Mathematically optimal — it kills the most expensive debt soonest.
• Snowball targets the smallest balance first. Behaviourally effective — it produces visible wins early.

In both, when a debt clears, its minimum payment rolls into the pot attacking the next one. That rollover is what makes either method accelerate, and it matters far more than the ordering.

The real comparison, on a real set of debts

Most debt payoff advice asserts that avalanche wins without saying by how much. Here is the actual gap, run through a full month-by-month simulation on this debt load:

Paying the $727 of minimums plus $300 extra each month — $1,027 total:

Two things stand out, and neither is what the usual advice implies.

They finish in the same month. Both clear the whole $26,300 in 31 months. Avalanche's advantage is $438.78 of interest — about 9% less — not a shorter payoff.

The early experience is completely different. Avalanche clears the store card in month 3 and then nothing at all until month 20, because it is grinding away at a $6,500 balance. Snowball clears the store card in month 3, credit card B in month 9 and the personal loan in month 16 — three accounts closed and three fewer bills to think about, in half the time.

The number that actually matters

Run the same debts with no extra payment at all — minimums only, with rollover — and the picture changes far more than the method ever does:

• Minimums only: 50 months, $9,505.71 interest
• Minimums plus $300: 31 months, $4,466.30 interest

That extra $300 a month saves $5,039.41 and 19 months.

Put the two decisions side by side: choosing avalanche over snowball is worth $438.78. Finding an extra $300 a month is worth $5,039.41 — roughly eleven times more.

The avalanche-versus-snowball argument gets the attention because it is the interesting question. It is not the important one. If choosing snowball is what gets you to actually keep paying the extra, snowball is the better method for you by a wide margin, and no spreadsheet disagrees.

Which debt payoff method should you pick?

A decision rule that respects both the maths and the reality:

• Pick avalanche if you have paid down debt before and finished, or if one balance carries a rate far above the rest — a 27% store card next to a 7% car loan is not a close call.
• Pick snowball if previous attempts stalled, or if the sheer number of separate bills is part of what makes the situation feel unmanageable. Closing accounts early is worth real money if it keeps you in the plan.
• Either works when your balances and rates are broadly similar. Stop optimising and start paying.

Whichever you choose, the mechanics are the same: never miss a minimum, put everything spare on one target, and roll each cleared minimum into the next target rather than absorbing it back into spending. That last step is where most plans quietly fail.

What this debt payoff planner does not model

The projection assumes a few things that real life does not always honour:

• Fixed interest rates. Most credit card APRs are variable and move with the prime rate.
• No new borrowing. Adding to a balance while paying it down is the most common reason a plan misses its date.
• Minimums stay constant. Card minimums are usually a percentage of the balance, so they shrink as you pay down — which makes the plan easier over time, not harder, provided you keep paying the original amount.
• No promotional or deferred-interest periods. Store cards in particular often carry deferred interest that is charged retroactively in full if any balance remains at the end of the promotional window. That single feature can dwarf every calculation on this page.
• No fees, penalty APRs or balance transfers. A missed payment can reprice a card to a penalty rate and undo months of progress.

If a balance is carrying a promotional 0% rate, check its expiry date before choosing a payoff order. Clearing it before that date usually outranks any rate-based ordering.

Data and method

Every figure on this page comes from a month-by-month simulation of the debt set above: interest accrues monthly at APR ÷ 12 on the outstanding balance, minimums are paid on all debts, the extra payment plus any freed-up minimums go to the current target, and the run ends when every balance reaches zero. Avalanche orders by descending APR, snowball by ascending balance. Nothing is rounded until display.

The planner runs entirely in your browser. Nothing you enter is transmitted or stored.

This is an estimate for planning, not financial advice, and it does not account for your individual circumstances. See the disclaimer. If a projection here looks wrong, send the balances and rates you used and it gets checked.