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Debt payoff plan: which strategy works best?

List your debts and how much you can pay each month. Compare paying the smallest debt first (snowball) or the highest-rate debt first (avalanche), and see when you become debt-free and how much interest each path costs.

Educational simulation. Not investment advice. Results are estimates based on the data you enter and do not replace advice from a qualified professional.

Reviewed on Oct 31, 2026
Your debts

Example values. Type each balance, its interest rate and the minimum payment from the statement or contract.

Your budget

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Debt consolidation loans and secured loans usually charge much less than credit cards. Watch out for origination fees.

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—Debt-free
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The four paths compared

In every path you pay at least the minimum on each debt and spend the same monthly budget. What changes is where the extra money goes.

Avalanche

Pay the minimum on all of them and put every extra dollar on the debt with the highest interest rate. When it is gone, that money moves to the next most expensive one. It is the path that pays the least interest overall.

Snowball

Pay the minimum on all of them and put the extra money on the smallest balance. Small debts disappear fast, which keeps you motivated. It usually costs a little more interest than the avalanche.

Minimum payments only

Pay only the minimum due on each debt, without speeding any of them up. It is the benchmark: it shows how much time and interest having no plan costs. When the minimum does not cover the interest, the debt grows.

Cheaper loan

Replace every debt with a single loan at a lower rate (such as a debt consolidation loan) and keep paying the same amount each month. It only pays off if you do not run up the cards again.

When you become debt-free

Total owed month by month in each strategy, spending the same budget.

Tap the chart to see the values.

How much interest you pay on each path

Total interest until everything is paid. Minimum payments may never end when the minimum barely covers the interest.

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The payoff order

The month each debt is paid off. When one ends, the money that went to it rolls over to the next.

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Month by month

Next step

Take this page’s results to another calculator with the fields already filled in.

Fit the payments into a monthly budget →

The summary lists your inputs, results, formulas, assumptions and sources. The full report also includes the charts and interpretations, in color. In the print dialog, choose Save as PDF.

Method, assumptions and sources

Formulas

Month m: balance = balance × (1 + monthly rate) − payment (monthly rate = APR ÷ 12)
Payment: minimum on each debt; the rest of the budget goes to the highest-rate debt (avalanche) or the smallest balance (snowball)
Cheaper loan: sum of balances, new loan rate, same monthly payment

Assumptions and limits

  • Educational simulation with monthly compounding and payments at the end of each month. It ignores late fees, penalty rates, promotional periods and new purchases.
  • Before taking a loan to pay off debts, compare the full annual cost and terms with the lender. This is not credit advice.
  • If the budget is below the sum of the minimum payments, the simulation uses that sum. The simulation stops at 50 years.

Official sources and references

Frequently asked questions

What is the difference between snowball and avalanche?

With the avalanche, the extra money goes to the debt with the highest interest rate; with the snowball, to the smallest balance. The avalanche pays less interest; the snowball gives quick wins that help many people stick to the plan.

Where do I find each debt’s rate and minimum payment?

On your card statement (APR and minimum payment due) and in your loan contract or online account. Choose whether you type yearly rates (APR) or monthly rates in the selector above the list; the calculator divides an APR by 12 to get the monthly rate.

How do I read the default example?

Four debts adding up to $16,500 with $900 a month to pay are cleared in 22 months with the avalanche, paying about $2,423 in interest ($55 less than the snowball). Paying only the minimums takes 56 months and about $5,691 of interest, while an 11% APR consolidation loan would cut interest to about $1,648.

Which strategy pays less interest?

The avalanche, because it kills the most expensive debt first. The gap is larger when the rates of your debts are very different from each other. If the difference shown is small, choose the method you are more likely to follow.

Is a debt consolidation loan worth it?

It can be, if the new loan’s total cost (APR with fees) is clearly lower than your current debts and you do not run up the cards again. Check the “Cheaper loan” path: it uses the same monthly payment, so the comparison is fair.

What does this calculator leave out?

Late fees, penalty rates, promotional 0% periods ending, new purchases and changes in minimum payments. It assumes payments at the end of each month and constant rates.

When should I get help?

If your budget does not even cover the monthly interest, contact your lenders to ask for a hardship plan, or look for a nonprofit credit counseling agency. Be wary of companies that charge upfront fees to settle your debts.

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Snowball or avalanche: how to choose a debt payoff strategy

If you have several debts and a fixed amount to pay each month, you need to decide where the extra money goes after paying the minimum on all of them. There are two main strategies, and the calculator shows how long each one takes and how much interest it costs with your numbers.

Avalanche: the most expensive debt first

Pay the minimum on every debt and put all the extra money on the one with the highest interest rate. When it is gone, roll its payment into the next most expensive debt. Mathematically it is the path that pays the least interest, because it attacks the debt that grows fastest.

Snowball: the smallest debt first

Pay the minimum on every debt and put the extra money on the smallest balance. Small debts disappear quickly, and each one you clear frees money for the next. It usually costs a bit more interest than the avalanche, but the quick wins keep many people on track.

Example

DebtBalanceAPR
Credit card$4,00024%
Store card$1,50030%
Personal loan$9,00012%

With $900 a month, the avalanche attacks the store card and then the credit card; the snowball starts with the store card too, because it is also the smallest. When the most expensive debt is not the smallest one, the two strategies split, and the calculator shows the difference.

Consolidating into a cheaper loan

Replacing expensive debts with a single loan at a lower rate can save a lot of interest, as long as you keep paying the same amount each month and do not run up the cards again. Compare offers by the full annual cost, including origination fees, and be careful with balance transfers whose promotional rate ends.