Two proven ways to pay off multiple debts
When you owe on several credit cards and loans, the order you pay them off matters. Both popular strategies work the same way at their core: you pay the minimum on every debt, put every extra dollar toward one target debt, and when that debt is gone you roll its payment into the next one. The only difference is which debt you target first.
- Debt avalanche: pay the highest interest rate first. Mathematically this almost always minimizes total interest and often gets you debt-free sooner.
- Debt snowball: pay the smallest balance first. You eliminate individual accounts faster, and many people find those quick wins keep them motivated.
How to use this calculator
Enter up to four debts with their balances, APRs, and minimum monthly payments, then add how much extra you can pay each month on top of the minimums. The calculator simulates both strategies month by month and shows the time to become debt-free, the total interest, and the order in which debts are paid off. Leave unused rows with a zero balance.
Which method should you choose?
If the interest savings shown for the avalanche method are large, it is usually worth choosing it. If the difference is small, which often happens when your debts have similar rates, the snowball may be the better choice because staying on track matters more than optimizing the last few dollars. Behavioral research has suggested that closing out individual accounts can help people persist with repayment. Some people use a hybrid: knock out one or two tiny balances first for momentum, then switch to avalanche.
Finding the extra money
The extra monthly payment is the engine of either plan. Look at recurring subscriptions, insurance premiums you can shop around, and variable spending such as dining out. Direct raises, tax refunds, and side income to the target debt. Even a modest extra amount can shorten the timeline considerably; try changing the extra payment in the calculator to see the effect.
Avoid these common mistakes
- Adding new debt while paying off old balances. Consider pausing card use during the plan.
- Skipping an emergency fund. A small cash buffer prevents a surprise expense from going back on a card.
- Missing minimum payments on non-target debts, which can bring late fees and penalty APRs.
- Ignoring lower-rate options. A balance transfer or consolidation loan can reduce interest, but only if you stop running up new balances.
Limitations
The simulation assumes constant APRs, fixed minimum payments, no new charges, and monthly compounding. Real minimum payments on credit cards often decline as balances fall; this calculator keeps your total monthly budget fixed, which is how both methods are meant to work.
Formula used
Each month: interest = balance × APR ÷ 12 is added to every debt; minimum payments are made on all debts; any remaining budget (sum of minimums + extra) goes to the target debt. Snowball targets the smallest balance; avalanche targets the highest APR. When a debt is paid off, its minimum rolls into the budget for the next target.
Frequently asked questions
Which is faster, snowball or avalanche?
Avalanche usually finishes at the same time or sooner and costs less interest, but the difference depends on your balances and rates.
Should a mortgage be included?
Typically no. These methods are usually applied to consumer debts like credit cards, personal and auto loans.
What if two debts have the same APR?
Either order produces nearly the same result; many people pick the smaller balance.
Does my total monthly payment change?
No. You keep paying the same total amount; freed-up minimums roll to the next debt.
Keep planning
- Credit Card Payoff Calculator — calculate a single card payoff.
- Auto Loan Calculator — check your car loan cost.
- Savings Goal Calculator — plan an emergency fund.