Phase 4 · General Utility
Debt Payoff Strategy Calculator
Same debts, same budget — but the order you attack them in changes everything. Run the snowball against the avalanche and see which gets you free faster and cheaper.
Which is better, the debt avalanche or the debt snowball?
The avalanche — highest APR first — is always cheaper, because every spare dollar goes where interest accrues fastest. The snowball — smallest balance first — is usually slightly slower and costlier, but clears individual debts sooner. Same budget, same debts; only the order of attack changes.
- Both run the same way: accrue interest, pay every minimum (max($25, 2% of balance)), then cascade the entire leftover onto one target debt.
- Worked example (defaults on this page): $23,000 across three debts at 24%, 18% and 7% with a $700 monthly budget — the avalanche finishes in 42 months with $5,849 of interest.
- The snowball takes 43 months and $6,992 — one month longer and $1,143 more interest.
- The gap widens as your APR spread widens. With rates close together the two are nearly identical, so pick the one you will actually finish.
Under the hood
The math, fully exposed
We simulate every month under both orders until the last debt is gone:
Each month: add interest = balance × APR ÷ 12 to every debt
Minimum payment = max($25, 2% of balance) on each debt
Avalanche: all leftover budget → highest-APR debt first
Snowball: all leftover budget → smallest-balance debt first
Compare total months and total interest of each
- Why avalanche wins on math: killing the highest rate first stops the most expensive interest soonest, so less interest accrues overall.
- Why snowball wins on behavior: clearing an entire debt early frees its minimum payment and gives a visible victory — momentum that keeps people going.
- Budget is the real lever: both strategies share the same budget. Raising it shortens payoff and cuts interest far more than the choice of order ever will.
Your directives
What to do next, based on your numbers
Adjust the sliders to generate tailored recommendations.
Answers
Frequently asked questions
What is the difference between the debt snowball and avalanche?
Both pay the minimum on every debt and throw all spare money at one target. The avalanche targets the highest interest rate first — mathematically optimal, least interest paid. The snowball targets the smallest balance first — you clear whole debts quickly for motivating early wins. Same budget, different order of attack.
Which method saves more money?
The avalanche always saves at least as much interest, often more, because it kills your most expensive debt soonest. This calculator shows the exact gap. The catch is behavioral: avalanche can mean grinding on a big high-rate balance for a long time before you clear anything.
So which one should I actually use?
Use avalanche if the interest savings are meaningful and you're disciplined enough to stick with it. Use snowball if you need the psychological momentum of clearing a debt quickly to stay motivated — a plan you actually follow beats an optimal one you abandon. If the two are close, snowball's motivation usually wins.
Why do minimum payments keep me in debt so long?
Minimum payments (often ~2% of the balance) are designed to cover mostly interest, so the principal barely moves. On a high-rate card, paying only the minimum can take decades and cost more than the original balance. The fix is the extra payment above the minimum — which is exactly what these strategies direct.