Debt Payoff Calculator

Each month: accrue interest on every debt, pay all the minimums, then send the leftover budget to one target debt — highest rate (avalanche) or smallest balance (snowball) — rolling each cleared debt’s payment onto the next.

How the payoff works

With several debts, the maths is no longer a single formula — it is a month-by-month race. Each month interest is added to every balance, you pay the minimum on each one, and whatever budget is left over is thrown at a single target debt to clear it faster. The moment that debt is gone, its whole payment — minimum plus the surplus — rolls onto the next target. That rolling, compounding effect is what gets people to debt-free far sooner than minimums alone, and it is exactly what this calculator simulates.

Enter every debt with its balance, rate and minimum, set what you can afford in total each month, and the calculator shows your debt-free date, the total interest, and the order your debts fall.

Worked example — three debts ($2,000 at 12%, $8,000 at 24%, $5,000 at 9%), $700 a month: The minimums come to $380, leaving $320 of surplus to attack one debt at a time. Avalanche clears the 24% debt first and ends up costing the least interest; the calculator shows how it compares with snowball and with paying only the minimums.

Avalanche vs snowball vs minimums

The two popular strategies differ only in which debt gets the surplus. Avalanche targets the highest interest rate first — mathematically optimal, it always pays the least total interest. Snowball targets the smallest balance first — you clear a whole debt sooner, and that early win is a powerful motivator even though it usually costs a little more interest. Minimums-only is the baseline: pay just the required amount on each and never get ahead. The calculator runs all three so you can see the trade-off in your own numbers — usually avalanche saves the most money and snowball saves it within a few months while feeling easier.

There is no universally right answer. If staying motivated is your challenge, the snowball’s quick first win can be worth the small extra cost. If you are purely optimising for money, avalanche wins.

Windfalls and a growing budget

Two things accelerate any plan. A windfall — a bonus, tax refund or gift — applied as a one-time extra payment goes straight to the target debt and can knock months off the schedule. And stepping up your monthly budget over time, as your income grows, compounds the effect year after year. Both are in the advanced options, so you can see how much faster a realistic plan gets you to zero.

A note on scope: this tool models fixed minimum payments. Real credit cards often set the minimum as a percentage of the balance, which falls as you pay down — so a real card may take a little longer on minimums-only than the fixed-minimum baseline shown here. Treat the minimums-only figure as an optimistic floor for that strategy.