Debt Payoff Calculator

List two to five debts with their balances, APRs and minimum payments, add whatever extra you can pay above the minimums, and the calculator simulates both standard payoff strategies month by month. The table compares them side by side: months until the last balance reaches zero, total interest and total paid, with the cheaper row highlighted. Below it sit the avalanche's payoff order and the interest it spares you relative to the snowball. Both plans spend the same amount every month; they differ only in which debt the spare money attacks first.

What the two strategies do

Both strategies begin the same way: every debt keeps receiving its minimum payment, and everything above the minimums goes to a single target. When the target is paid off, its minimum does not return to your pocket — it joins the attack money and rolls into the next target, so the payment aimed at each successive debt keeps growing. The disagreement is only over who the target is. The debt snowball attacks the smallest balance first; as the Consumer Financial Protection Bureau describes it, you keep making the minimum payments on all your debts, put any extra funds toward the smallest one, and once it is paid in full, dedicate the freed-up money to the next smallest. The avalanche — the CFPB calls it the highest interest rate method and never actually uses the word avalanche — attacks the highest-APR debt first, because it is the one costing you the most. The bureau presents the two neutrally: eliminating the costliest debts first can save money in the long run, while the snowball risks paying more.

How the simulation runs

With several debts there is no closed-form answer, so the calculator runs the ledger forward one month at a time. Each month, every open debt accrues interest at one twelfth of its APR:

interest = balance × APR ÷ 1,200

The monthly budget — every starting minimum plus the extra payment — is spent in the same order every month: minimums first, then everything left to the current target — the smallest open balance under the snowball, the highest open APR under the avalanche. When a payment closes a debt mid-month, the remainder cascades straight into the next target rather than waiting a month. Only the single-debt case has a closed form: a balance B at monthly rate i, paid at P per month, clears in

N = −log(1 − i × B ÷ P) ÷ log(1 + i)

months, which is what the simulation reproduces numerically once one debt is left standing. Two guards protect the result: every minimum payment must exceed its debt's first month of interest, since at or below that line a balance never falls, and a payoff running past 1,200 months — a full century — reports an error rather than a meaningless number.

A worked example with three debts

The defaults describe a common mix: a 4,500 credit card at 22.15 percent — the Federal Reserve's preliminary G.19 figure for the average rate on card accounts assessed interest in the second quarter of 2026 — with a 95 minimum, a 12,000 car loan at 7 percent with a 240 minimum, and a 6,500 student loan at 5 percent with a 70 minimum, plus 100 extra each month. The budget is therefore 95 + 240 + 70 + 100 = 505. In the first month the card accrues 4,500 × 22.15 ÷ 1,200 = 83.06 in interest, the car loan 12,000 × 7 ÷ 1,200 = 70.00, and the student loan 6,500 × 5 ÷ 1,200 = 27.08. Both strategies agree on the opening move, because the card is at once the smallest balance and the highest rate: it gets its 95 minimum plus the 100 extra and is gone in month 31. From there they part ways. The snowball sends the freed-up 195 to the student loan, the smaller remaining balance, clearing it in month 51 and the car loan in month 55. The avalanche sends the same 195 to the 7 percent car loan, clearing it in month 46 and the student loan in month 55. Both plans finish in 55 months, but the snowball pays 4,586.85 in interest and the avalanche 4,516.84 — a saving of 70.01 for reordering the same dollars. Drop the extra payment to zero and the same debts take 78 months and 8,430.38 in interest either way: the size of the payment does far more work than the order of it.

From installment plans to payoff doctrines

A household juggling several debts at several rates is a historically recent situation. Installment credit is a nineteenth-century invention — the furniture firm Cowperthwaite and Sons is reported to have introduced consumer installment selling in 1807, and the Singer Sewing Machine Company to have adopted the plan around 1850 — but the automobile industrialized it: General Motors set up its financing arm, GMAC, in 1919, and by 1920 installment buying had lost its class stigma and become the standard way to finance household purchases. By 1930, by one public-radio history's count, most appliances, radios and furniture were bought on installment, including more than two-thirds of automobiles. Still, an installment contract was one debt on one schedule. The multi-account balancing act this calculator models arrived with revolving credit: in September 1958, Bank of America launched its BankAmericard, with its 500 dollar line of credit, in Fresno, California — the experiment that grew into Visa, and into households carrying several balances at different rates at once. The New York Fed's quarterly household debt report counted 18.8 trillion dollars in the second quarter of 2026 — 1.26 trillion of it on credit cards, 1.71 trillion in auto loans and 1.65 trillion in student loans — figures reported by the ABA Banking Journal. The payoff doctrines are younger still. Dave Ramsey popularized the smallest-balance-first snowball — he did not invent it — most prominently through The Total Money Makeover, first published in 2003, and his rationale is behavioral: his company's own write-up of the method rests on his maxim that personal finance is 80 percent behavior and only 20 percent head knowledge. The avalanche never needed a popularizer, because it is what the arithmetic recommends: a dollar aimed at the highest-rate balance removes at least as much future interest as a dollar aimed anywhere else, so for the same budget the avalanche never costs more than the snowball and usually costs less, assuming every planned payment is actually made.

What the research actually shows

The snowball's scientific reputation rests on a study more careful than its popular retellings. David Gal and Blakeley B. McShane, in "Can Small Victories Help Win the War? Evidence from Consumer Debt Management", published in the Journal of Marketing Research in August 2012 (volume 49, number 4, pages 487 to 501), analyzed records from a debt settlement company — covering how some 6,000 people worked off credit card debt, per the Kellogg School's account — and found that closing debt accounts predicted debt elimination regardless of the dollar balance of the closed accounts. That is evidence that finishing off whole accounts sustains persistence, not that the snowball is cheaper or faster: the data is correlational, from one program, with persistence as the outcome. In the same Kellogg interview, Gal suggested consumers should perhaps be told of both the rationally optimal approach of paying higher-interest balances first and the possible psychological benefits of closing accounts. Laboratory work points the same double-edged way. In a 2014 NBER working paper, "Small Victories: Creating Intrinsic Motivation in Savings and Debt Reduction," Brown and Lahey found that people complete a mildly unpleasant task faster when its unequal parts are arranged in ascending order — and also that, offered a choice of orderings, subjects picked the ascending one least often. The CFPB itself declines to crown a winner, presenting both orderings and their trade-offs and leaving the choice to the borrower — the framing this calculator borrows.

Assumptions and limits

The simulation holds every input still: minimum payments stay at their entered value, APRs never change, no new charges land on the cards, and the full budget arrives every month. Real card minimums are recalculated as a percentage of the balance and decline as it falls, and real rates move, so treat the month counts as a planning estimate rather than a schedule. Interest compounds monthly at one twelfth of the APR, with no daily accrual, fees or penalty rates. Mortgages are usually left off the list, a modeling choice rather than a rule. When both strategies produce the same interest cost, no row is highlighted and the saved figure reads zero. Nothing here is credit counseling; if the minimums themselves are out of reach, nonprofit credit counseling agencies exist for that situation.

Results are estimates from a fixed-payment simulation and exclude fees, rate changes and new spending, so real payoff dates will differ. See the site disclaimer.

Frequently asked questions

Is the debt snowball or the debt avalanche better?

They spend the same money each month and differ only in ordering. The Consumer Financial Protection Bureau describes both neutrally: the snowball clears the smallest balance first and dedicates the freed-up payment to the next smallest, while the highest interest rate method clears the costliest debt first because it is costing you the most. For the same budget the avalanche never pays more total interest and usually pays less, assuming every planned payment is made, so the choice is between a mathematical edge and the motivational lift of quick wins.

How much money does the avalanche method actually save?

There is no universal number, because the gap depends on how far apart the interest rates sit and how large the high-rate balances are. On this calculator's three-debt defaults the avalanche saves 70.01 dollars over an identical 55 months; on the four-debt defaults it saves 545.62 dollars and finishes in 55 months against the snowball's 56. When the monthly budget is large relative to the debts, the two orderings converge.

Is there any real evidence behind the debt snowball?

Yes, but it is precise about what it shows. Gal and McShane, writing in the Journal of Marketing Research in 2012, found that closing accounts, independent of the dollar balances closed, predicted whether people in a debt settlement program eliminated their debt. Brown and Lahey's 2014 NBER working paper found experimental subjects finish an unpleasant task faster when its parts are arranged smallest first. Neither study shows the snowball minimizes cost, and neither shows it gets people out of debt faster than the alternative.

Did Dave Ramsey invent the debt snowball method?

He popularized it rather than invented it. Ramsey made smallest-balance-first ordering a centerpiece of his advice, most prominently in The Total Money Makeover, first published in 2003, on the argument that success with money is driven far more by behavior than by knowledge. Paying accounts smallest first predates the book, and the rollover mechanic works identically whichever order you choose.

Should I include my mortgage in a debt payoff plan?

Typically no. Mortgages are the bulk of American household debt — 13.1 trillion of the 18.8 trillion dollars the New York Fed counted for the second quarter of 2026, per ABA Banking Journal reporting — but they run for decades at comparatively low rates and carry tax treatment of their own, so folding one into a five-debt attack plan distorts the comparison. The usual practice is to list credit cards, car loans, personal loans and student loans, and to treat the mortgage payment as part of the fixed monthly background instead. That is a modeling choice, not a rule.

What if I can only afford the minimum payments?

Set the extra payment to zero and the simulation still rolls each freed-up minimum into the remaining debts, but the two strategies land very close together because there is little spare money to direct. The size of the total payment does far more work than the order of it. Note that this calculator requires every minimum to be larger than the first month of interest on its debt; at or below that line a balance never falls.