Your Debts

Debt Name Balance ($) Interest Rate (%) Min. Payment ($)

Extra Monthly Payment:

Applied to target debt each month after minimums

Avalanche Method

Highest Interest First

Pay minimums on all debts, then throw extra money at the highest-interest debt first. Mathematically optimal.

Debt-Free Date

Total Interest Paid

Total Months

Snowball Method

Smallest Balance First

Pay minimums on all debts, then attack the smallest balance first. Provides psychological wins and momentum.

Debt-Free Date

Total Interest Paid

Total Months

Total Debt Over Time

Month-by-Month Breakdown

Month	Payment	Principal	Interest	Remaining Balance	Target Debt

Avalanche vs Snowball: The Full Comparison

Methodology, research, and worked examples.

The Avalanche Method

The avalanche method is mathematically optimal. You pay minimums on all debts, then direct all extra money to the debt with the highest interest rate. Once that debt is paid off, you roll its payment into the next highest-rate debt.

Monthly Interest = Balance × (Annual Rate / 12) Priority Order: Sort debts by interest rate DESC Example: Credit Card A: $5,000 @ 22% = $91.67/mo interest Personal Loan: $8,000 @ 12% = $80.00/mo interest Car Loan: $12,000 @ 7% = $70.00/mo interest Avalanche attacks Credit Card A first. Total interest saved vs minimum payments only: typically 15-40% depending on balances.

The Snowball Method

The snowball method prioritises psychological momentum. You pay minimums on all debts, then attack the smallest balance first. Each paid-off debt gives you a win and frees up cash to accelerate the next one.

Priority Order: Sort debts by balance ASC Example: Store Card: $800 @ 18% (pay off first) Credit Card: $3,200 @ 22% Personal Loan: $8,000 @ 12% Car Loan: $12,000 @ 7% Research (Gal, McShane, 2012) shows snowball users are more likely to complete debt payoff despite paying more interest overall.

Which Method Should You Use?

The right method depends on your psychology and situation:

Use Avalanche if: You are disciplined, motivated by numbers, and want to minimise total cost. Best when interest rate differences are large (e.g. 22% credit card vs 7% car loan).
Use Snowball if: You have struggled to stick to debt plans before, have many small debts, or need early wins to stay motivated.
Hybrid approach: Pay off one or two small debts first for momentum, then switch to avalanche for the remaining larger debts.

Studies show the difference in total interest between methods is often smaller than expected -- the most important factor is consistency.

The Power of Extra Payments

Even small extra payments dramatically reduce payoff time and interest:

Example: $10,000 credit card @ 20% p.a. Minimum payment (2% of balance): Payoff: 32+ years | Interest: $14,000+ $300/month fixed payment: Payoff: 4.5 years | Interest: $6,200 $500/month fixed payment: Payoff: 2.5 years | Interest: $3,100 Extra $200/month saves $3,100 in interest and 2 years of payments.

Frequently Asked Questions

Which method saves more money: avalanche or snowball?

The avalanche method always saves more money in total interest paid because you eliminate the highest-cost debt first. However, the difference is often smaller than people expect -- typically 5-20% less interest with avalanche. The snowball method can be more effective in practice if it keeps you motivated to stick with the plan.

Should I include my mortgage in this calculator?

You can include your mortgage, but most financial advisors recommend treating it separately. Mortgages have low interest rates and long terms, and the tax treatment differs. Focus on high-interest consumer debt (credit cards, personal loans) first, then consider accelerating your mortgage separately.

What should I do after I pay off all my debts?

Redirect the money you were paying toward debt into savings and investments. If you were paying $800/month toward debt, invest that same $800/month. The habit of making that payment is already formed -- just redirect it to wealth-building.

Does this calculator account for minimum payment changes?

This calculator uses fixed minimum payments as entered. In reality, credit card minimum payments often decrease as the balance falls (typically 2% of outstanding balance). Using a fixed minimum payment is a conservative assumption that may slightly underestimate payoff time for credit cards.

Should I pay off debt or invest?

The mathematical answer: if your debt interest rate is higher than your expected investment return, pay off debt first. In practice, pay off all debt above 7-8% before investing. For debt below 5% (e.g. mortgage), investing in diversified assets may generate better long-term returns. Always maintain an emergency fund regardless.

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Acquiry. (2026). Debt payoff calculator: Avalanche vs snowball method [Web application]. Acquiry Knowledge Hub. https://www.acquiry.com/knowledge/debt-payoff-calculator/

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Debt Payoff Calculator