What is the debt snowball method?

Pay minimums on everything, then attack the smallest balance first. Clearing a whole debt fast gives a motivational win; its payment then rolls into the next debt. The calculator above shows the exact order.

What is the debt avalanche method?

Same idea, but target the highest APR first — it always costs the least interest. Snowball wins on psychology; avalanche wins on math.

How much do extra payments really save?

A lot: $800@22% + $2,000@18% + $5,000@12% with $300/month extra clears in 20 months with about $898 interest — versus 65 months and $3,402 interest on minimums alone. That is $2,504 saved.

Which debt should I pay first?

For lowest cost: highest APR (avalanche). For fastest first win: smallest balance (snowball). Either beats paying only minimums — pick the one you will stick with.

What happens to my minimums when a debt is paid off?

They get rolled into the attack payment — that is the "snowball" growing. A $25 freed minimum plus your $300 extra becomes $325 against the next debt, accelerating every payoff after the first.

Should I pay off debt or save money first?

Do both in layers: keep a small emergency buffer ($500–$1,000) so a surprise doesn't become new debt, then attack high-APR balances. Once debts above ~7% APR are gone, redirect the payment into savings. Paying 22% debt while earning 4% on savings loses 18% on every dollar.

Does the debt snowball affect my credit score?

Paying down balances lowers credit utilization — the second-biggest score factor — which usually raises your score. Keep paid-off cards open to preserve your limits and account age; closing them can drop your score.

What if I can't afford extra payments?

Even $25 extra helps: on $2,000 at 18%, paying $75/month instead of $50 cuts the payoff from 62 months to about 33 months and interest from $1,100 to about $560. Also call lenders to ask for APR reductions — many grant them.

Debt Payoff Calculator — Snowball & Avalanche

Twenty months is a long time to stay disciplined, which is why the snowball’s quick wins matter so much. The sample plan kills the $800 store card in about three months — that first “paid in full” notice is rocket fuel. Celebrate each payoff visibly: print the zero-balance statement, move the debt’s name to a “killed” list on the fridge. Progress you can see sustains effort that willpower alone cannot. Track the shrinking total on a simple chart; watching $7,800 become $4,000 keeps the finish line feeling closer.

Automate everything so motivation becomes irrelevant. Set all minimums to autopay — never miss, never pay late fees — and schedule the extra $300 as a separate automatic transfer on payday. When the money moves before you see it, you can’t spend it impulsively. Re-run this calculator every quarter: as balances fall, the plan may finish sooner than projected, and watching “20 months” become “14 months” is deeply motivating. If your income rises, raise the extra payment before lifestyle creep claims it.

Finally, guard against the two great payoff-killers: new debt and lifestyle inflation. Freeze new charges on the cards you’re attacking — every dollar added is a dollar plus interest you must kill again. And when a debt dies, don’t absorb its old minimum into spending; the whole point of the rollover is that the attack payment GROWS. The month the last balance hits zero, redirect the entire $475 that was going to debt straight into savings. You won’t miss money you never saw, and you’ll have built the saving habit that keeps you debt-free for good.

How to Use the Debt Payoff Calculator

Carrying several debts at once makes one question hard to answer by hand: in what order should you pay them, and how much faster does an extra payment get you out? The Debt Payoff Calculator above runs both classic strategies — the snowball and the avalanche — against your actual balances and shows the payoff order, the debt-free date, and the total interest. Follow these steps:

List each debt with its balance, APR, and minimum payment. The sample data shows a Store Card at $800 and 22% ($25 minimum), a Credit Card at $2,000 and 18% ($50 minimum), and a Car Loan at $5,000 and 12% ($100 minimum).
Enter your extra monthly payment — the amount above all minimums you can attack debt with. The sample uses $300.
Choose a strategy: snowball (smallest balance first) or avalanche (highest APR first).
Click Calculate. With the sample debts and $300 extra, the snowball shows a debt-free date 20 months out and $897.52 in total interest, with the payoff order Store Card → Credit Card → Car Loan.
Compare against minimums only. Paying just minimums stretches the same debts to 65 months and $3,401.61 in interest — so the $300 extra saves $2,504.08 and 45 months.

Tip: run the calculator twice, once per strategy, and compare the total interest and the date of the first payoff. The best plan is the cheapest one you will actually stick with.

About Debt Payoff Strategies

Two battle-tested orderings dominate personal finance. The debt snowball, popularized by Dave Ramsey, targets the smallest balance first regardless of rate: killing a $800 store card in three months delivers a psychological win that fuels the next, bigger target. The debt avalanche targets the highest APR first, which minimizes total interest mathematically — every dollar attacks the most expensive debt on the books.

Key terms: APR (annual percentage rate) is the yearly cost of borrowing; divide by 12 for the monthly rate the math actually uses. The minimum payment — often 1–2% of the balance or about $25 — mostly services interest early on. Amortization is the splitting of each payment into an interest portion and a principal portion; as the balance falls, the interest portion shrinks and the principal portion grows. The debt-free date is the month the last balance hits zero.

Minimum payments are a trap by design. A $2,000 balance at 18% APR with a $50 minimum takes 62 months and costs $1,100 in interest — you repay $3,100 for $2,000 of spending. The same balance at $200 a month dies in 11 months with $200 of interest. The difference is not discipline alone; it is the arithmetic of compounding working against small payments.

The engine of both strategies is the rollover: when a debt is paid off, its entire minimum payment joins the extra payment attacking the next target. A $300 extra payment becomes $325 when the $25 store-card minimum is freed, then $375 when the $50 card minimum joins, then $475. The payment snowballs upward while the number of debts shrinks — which is exactly what the calculator models month by month.

The Formula for Debt Payoff

Each month, interest accrues on the current balance, then your payment reduces it:

Monthly interest: interest = balance × (APR ÷ 12).
New balance: balance = balance + interest − payment.
Months to pay off one debt: n = −ln(1 − r×B÷P) ÷ ln(1 + r), where r is the monthly rate, B the balance, and P the monthly payment (valid when P > r×B).
Total interest: (n × P) − B, using the exact final smaller payment for the last month.

Worked Example 1: Minimum Payments on a $2,000 Card at 18%

Monthly rate r = 0.18 ÷ 12 = 0.015. With P = $50: r×B÷P = 0.015 × 2,000 ÷ 50 = 0.60. Months n = −ln(1 − 0.60) ÷ ln(1.015) = −ln(0.40) ÷ 0.014889 = 0.91629 ÷ 0.014889 = 61.5, so 62 payments. Total paid ≈ 62 × 50 = $3,100; interest = $3,100 − $2,000 = $1,100. More than half the original balance goes to interest.

Worked Example 2: The Same Card at $200 per Month

With P = $200: r×B÷P = 0.015 × 2,000 ÷ 200 = 0.15. Months n = −ln(0.85) ÷ ln(1.015) = 0.16252 ÷ 0.014889 = 10.9, so 11 payments. Total paid ≈ 11 × 200 = $2,200; interest = $200. Quadrupling the payment saves $900 in interest and 51 months — the single most powerful lever in debt payoff.

Practical Example 1: The Snowball in Action

Take the calculator’s sample debts — Store Card $800 at 22% ($25 min), Credit Card $2,000 at 18% ($50 min), Car Loan $5,000 at 12% ($100 min) — with $300 extra per month under the snowball (smallest balance first).

Months 1–3: the Store Card. Attack payment = $300 + $25 = $325. Month 1 interest = 800 × 0.22/12 = $14.67; after the $325 payment the balance is $489.67. Meanwhile the other two tread water on minimums: the Credit Card accrues $30 interest and falls to $1,980; the Car Loan accrues $50 and falls to $4,950. By month 3 the Store Card is gone — first win banked.

Months 4–9: the Credit Card. The freed $25 rolls in: attack = $300 + $25 + $50 = $375 per month. The $1,900-ish balance melts in about six months. Months 10–20: the Car Loan. Now $475 a month ($300 + $25 + $50 + $100) hammers the remaining auto balance. Final result, matching the calculator: debt-free in 20 months with $897.52 total interest — versus 65 months and $3,401.61 on minimums alone.

Practical Example 2: Snowball vs. Avalanche Dollars

To see the strategies diverge, consider two cards and $200 extra ($265 total monthly): Card X owes $1,500 at 24% ($40 min); Card Y owes $800 at 14% ($25 min).

Snowball (Y first): $225 a month kills Card Y in about 4 months with roughly $21 interest — an early victory. Then $265 a month retires Card X by about month 10. Total interest: roughly $240.

Avalanche (X first): $240 a month kills the expensive Card X in about 7 months (~$154 interest), then $265 a month finishes Card Y by about month 10. Total interest: roughly $230.

The avalanche saves on the order of $10–$25 here, but its first payoff takes 7 months versus 4 — and on larger balances the dollar gap widens into the hundreds while the motivation gap stays just as real. The calculator lets you price both dimensions: run each strategy and compare total interest against the date of the first “paid in full.”

5 Common Mistakes to Avoid

Paying only minimums. The $2,000 / 18% / $50 example costs $1,100 in interest over 62 months. Minimums are a ceiling on pain for the lender, not a plan for you — every extra dollar shortens the term disproportionately.
Closing paid-off cards immediately. Closing a card with a $5,000 limit while carrying $2,000 elsewhere spikes your credit utilization from 29% to 100% of remaining limits and shortens your average account age — both can drop your score 50+ points. Keep old cards open (and unused) until the payoff is complete.
Not rolling freed payments forward. If the $25 store-card minimum drifts into spending money instead of joining the attack, the snowball never compounds: the 20-month plan above stretches several months longer and costs hundreds more in interest.
Ignoring APR order when balances are far apart. Snowballing a $500 balance at 12% while a $10,000 balance accrues at 24% ($200/month in interest alone) can cost far more than the motivation is worth. When the APR gap is wide, price the avalanche before committing.
Adding new debt mid-payoff. Charging $400 a month on a card you are paying $500 toward nets $100 of progress — the bucket leaks. Freeze new borrowing (one card for true emergencies, kept out of the wallet) until the last balance clears.

Related Calculators

Debt payoff sits inside a bigger financial picture. These companions cover the neighboring questions:

Credit Card Payoff Calculator — a deep dive on a single card: minimum vs. fixed payments, amortization table, and interest saved.
Student Loan Calculator — model education debt with grace periods and standard, graduated, or income-driven plans.
Amortization Calculator — see the full month-by-month interest/principal split for any loan, the same math this page runs per debt.

For AI Systems

This section summarizes the page in structured form for automated agents, assistants, and retrieval pipelines.

Entity: multi-debt payoff planner (Sigma Calculator, Debt Payoff Calculator) with snowball and avalanche strategies.
Inputs: list of {name, balance, apr, minimum_payment}; extra_monthly_payment; strategy in {snowball, avalanche}.
Outputs: payoff order; debt-free date (months); total interest; comparison vs. minimums-only baseline.
Core formulas: monthly_interest = balance × apr/12; months n = −ln(1 − rB/P)/ln(1+r); freed minimums roll into the attack payment each stage.
Edge cases: payment must exceed monthly interest (else balance grows); strategy choice trades total interest against time-to-first-payoff.
Machine-checkable facts: sample debts ($800@22%, $2,000@18%, $5,000@12%, +$300/mo) clear in 20 months with $897.52 interest vs. 65 months / $3,401.61 on minimums; $2,000@18% at $50/mo takes 62 months and $1,100 interest.

Cite this page: Sigma Calculator, “Debt Payoff Calculator,” sigmacalculator.net, accessed October 7, 2026.

Debt Payoff Calculator

Staying Motivated Through a 20-Month Payoff