Debt Payoff Calculator
Enter up to three debts - credit cards, personal loans, student loans, or any fixed-rate debt - with their current balance, interest rate, and minimum monthly payment. Choose how much extra you can put toward debt each month, and the calculator shows you exactly when each debt is paid off, how much interest you save with the avalanche vs snowball strategy, and a month-by-month payoff schedule.
How the avalanche and snowball methods work
Both strategies start the same way: pay the minimum required amount on every debt each month. The difference is where you send any extra money. With the avalanche method, every extra dollar goes to the debt with the highest interest rate. Once that debt reaches zero, you roll its minimum payment plus your extra onto the next highest-rate debt, building a larger and larger payment as each balance disappears. With the snowball method, you target the smallest balance first instead of the highest rate. When it hits zero, you redirect its minimum onto the next smallest. The avalanche method almost always saves more money in total interest. The snowball method pays off individual accounts faster, which can be motivating when you have several debts and want to see them disappear.
Why extra payments matter so much
Credit card and personal loan interest compounds monthly, meaning you pay interest on interest you have already accrued. Even a modest extra payment breaks this compounding effect and reduces the principal balance that future interest is calculated on. A $100 extra payment on a 20% APR debt saves approximately $20 per year in interest for every year it remains on the balance - and because that principal is gone permanently, those savings compound forward through the entire remaining life of the loan. This calculator shows the "interest saved vs minimums only" figure so you can see exactly how much your extra payment is worth over the full payoff period.
Understanding your payoff timeline and total cost
The total amount paid figure is the single most important number in debt planning. It is the sum of every dollar you will ever hand over: original principal plus all interest. On a high-rate debt, the interest component can be 30-60% of that total if you only pay minimums. The total interest divided by your original balance gives the effective "cost" of carrying the debt to zero. Monthly interest for each debt is calculated as balance x (APR / 12). The calculator applies this every month, subtracts your payments, and repeats until every balance reaches zero - giving you the exact month count and cumulative interest.
When to consider debt consolidation
Consolidation replaces multiple debts with a single loan at a (ideally lower) interest rate. It makes sense when you can qualify for a rate meaningfully below your current weighted average rate, when juggling several due dates is causing missed payments, or when a single lower payment would free cash flow for essentials. It is not a good fit if the consolidation loan has a longer term that increases your total interest even at a lower rate, or if it converts secured debt to unsecured or vice versa. Compare the new loan total cost against the avalanche scenario this calculator produces before deciding.
Debt Payoff Strategy Comparison
| Strategy | Priority Order | Best For | Interest Cost |
|---|---|---|---|
| Avalanche | Highest APR first | Minimizing total interest paid | Lowest |
| Snowball | Lowest balance first | Motivation and quick wins | Slightly higher |
| Minimum only | No priority order | Tight cash flow months | Highest |
| Consolidation | Single new loan | Simplifying multiple debts | Varies by rate |
Choosing the right strategy depends on your financial goals and motivation style.
Frequently asked questions
Which method saves more money: avalanche or snowball?
The avalanche method nearly always saves more total interest because it eliminates the highest-rate debt first, reducing the balance on which interest compounds. The snowball method may save similar amounts if your debts happen to have similar rates, but on typical credit card vs personal loan mixes, the avalanche advantage is often hundreds of dollars. This calculator shows you both totals side by side so you can compare directly.
How is the monthly interest calculated?
Monthly interest = current balance x (APR / 100 / 12). For example, a $5,000 balance at 19.99% APR accrues $5,000 x (0.1999 / 12) = approximately $83.29 in interest in the first month. Your minimum payment covers that interest first, and only the remainder reduces principal - which is why minimum-only payoff timelines can stretch to 10 or more years on a large high-rate balance.
What is the minimum payment I should enter?
Enter the required minimum payment shown on your most recent statement. Credit cards typically require 1-3% of the outstanding balance or a flat $25-35, whichever is larger. Personal loans usually have a fixed monthly payment. If you are already paying more than the minimum, you can enter your actual payment and set extra payment to zero, or split it into minimum plus extra to use the rolling-payment feature.
Does the calculator account for freed payments when a debt is paid off?
Yes. When one debt reaches a zero balance, its former minimum payment is automatically added to the extra pool and redirected to the next priority debt. This "debt roll" is the core mechanic of both the avalanche and snowball methods - your total monthly payment stays roughly constant while the payoff pressure on remaining debts grows.
Should I pay off debt or invest extra money?
The mathematical answer compares your debt interest rate against your expected investment return. If you have credit card debt at 20% APR, paying it off delivers a guaranteed 20% return because you stop accruing that interest. Long-run stock market returns average roughly 7-10% annually before tax - so high-rate consumer debt is almost always worth eliminating first. At lower rates (a mortgage at 3-5% or a student loan at 5-6%), the comparison is closer and depends on your tax situation, risk tolerance, and whether your employer matches retirement contributions.