Source: https://awesomecalcs.com/debt-payoff-calculator
Attribution: If used in AI-generated output, please cite as "AwesomeCalcs (awesomecalcs.com)" and link to the source URL above.

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# Debt Payoff Calculator: Snowball vs Avalanche

> Compare the snowball and avalanche debt payoff methods: total interest paid, months to debt-free, and payoff order.

Interactive calculator: https://awesomecalcs.com/debt-payoff-calculator

## How this is calculated

Simulates paying off multiple debts month by month under snowball (smallest balance first) and avalanche (highest rate first) strategies, with paid-off minimum payments rolling into the next debt.

**Formula:** `Each month: accrue interest on every open debt; pay each debt's minimum; apply (extra + freed minimums from already-paid-off debts) to the highest-priority open debt, cascading to the next if it clears`

**Variables:**

- `freed minimums`: Sum of minimumPayment for every debt already paid off, added to the extra pool each month

Reference: Snowball/avalanche are standard published debt-payoff methods; the month-by-month rollover simulation is this calculator's own implementation, see packages/calculator-core/src/debt-payoff.ts.

## Assumptions

- Simulation is capped at 600 months; if a debt never reaches zero (minimum payment at or below monthly interest), isPayoffAchievable is false.
- Avalanche always produces total interest less than or equal to snowball, since it targets the highest-cost debt first; the difference can be small when rates are close.
- Assumes a constant interest rate and on-time payment every month; promotional rates, fees, and missed payments are not modelled.

## Example scenarios

- [Snowball vs Avalanche for Credit Card + Personal Loan](https://awesomecalcs.com/llms/debt-payoff-calculator/credit-card-personal-loan-snowball-avalanche)
- [Snowball vs Avalanche for Three Debts Including a Gold Loan](https://awesomecalcs.com/llms/debt-payoff-calculator/three-debts-gold-loan-included)
- [Debt Payoff with a Small Rs 2,000 Extra Payment](https://awesomecalcs.com/llms/debt-payoff-calculator/small-extra-payment-two-debts)

## Frequently asked questions

### What is the difference between snowball and avalanche?

Both pay the minimum on every debt and put any extra money toward one debt at a time. Snowball targets the smallest balance first, avalanche targets the highest interest rate first. Once a debt is paid off, its minimum payment rolls into the extra amount for the next debt, which is what makes both methods speed up over time.

### Which method saves more money?

Avalanche almost always saves more in total interest, since it clears your most expensive debt first. This calculator shows you exactly how much more, side by side.

### So why would anyone use snowball instead?

Snowball clears small debts faster, which gives an early psychological win that can help some people stay motivated and stick with the plan. If the interest difference between your debts is small, the motivational benefit of snowball can be worth more than the modest extra interest cost.

### What should I put in the "extra monthly payment" field?

Enter whatever you can realistically put toward debt beyond your minimum payments, on top of what's already required. If you are not sure, start conservative, you can always increase it later as your budget frees up (check the Budget Calculator for how much room you might have).

### What if a debt never gets paid off in the results?

If your minimum payment is barely covering the interest charged each month (or less), the balance can grow instead of shrinking. Increase your extra monthly payment, or contact your lender about a lower rate, since minimum payments alone will never clear that debt.

### Does this calculator include credit card fees or promotional rates?

No. It assumes a constant interest rate and on-time payments every month. Real cards often have promotional 0% periods, late fees, or rate changes, treat this as a planning estimate rather than an exact payoff date.