How to use the debt snowball calculator
- Under Your debts, enter each debt's Balance, APR and Minimum payment from a statement. Use + Add a debt for more, up to 25.
- Type your Extra payment each month, the money you can pay beyond all minimums combined. The cash flow calculator shows what you can spare.
- Optionally add a One-time lump sum with its month number, and set Plan starts.
- Pick Snowball, Avalanche or Custom order, read your debt-free date, then Download CSV or Print plan.
How the calculation works
Both methods pay every minimum, then send all the extra money to one target debt. Snowball targets the smallest balance first (higher APR breaks ties). Avalanche targets the highest APR first (smaller balance breaks ties). Custom order follows your sequence. A paid-off debt's payment rolls into the next target.
Each month the tool adds interest (balance × APR ÷ 12) to every debt, pays the minimums, then sends everything left to the target. A payment larger than what a debt still owes spills into the next target that same month. Minimums stay fixed, and the run stops at 600 months.
Worked example
The tool opens with a $1,000 store card at 18% (minimum $25), a $5,000 car loan at 7% (minimum $100) and a $10,000 card at 24% (minimum $250), plus $200 extra, so you pay $575 a month.
Snowball clears the store card in month 5, the car loan in month 20 and the big card in month 39, for $5,938.79 in interest. Avalanche goes after the 24% card first and finishes in month 36 for $4,484.18, which is $1,454.61 less. Minimums only take 82 months and cost $11,786.63, so snowball saves $5,847.84 and avalanche saves $7,302.45. Dates depend on your Plan starts setting.
Limits to know about
- Real card minimums usually shrink with the balance. Here they stay as entered, as a snowball assumes.
- New charges, fees and rate changes are not modeled. A minimum at or below one month of interest triggers a warning, since that debt never shrinks by itself.
For one balance, try the credit card payoff calculator or loan payoff calculator. Build a starter buffer first with the emergency fund calculator.
Debt snowball FAQ
Which is better, the debt snowball or the debt avalanche?
Avalanche usually costs the least interest, because it pays your highest rate first. Snowball clears whole accounts sooner, and Gal and McShane found that closing accounts predicted who got out of debt, whatever the balances were. Compare both on your own numbers, then pick the plan you will keep paying.
What is the debt snowball method?
You pay the minimum on every debt and put all your extra money on the smallest balance. When that debt is gone, you add its payment to the next smallest, so the payment grows like a rolling snowball.
Should I include my mortgage or car loan?
Add car loans, student loans and personal loans if you want them in the plan, since they have fixed payments and an end date. Many people leave the mortgage out because it is large and usually has a lower rate, and a 30-year balance would push the debt-free date decades out.
How do I enter a 0% balance transfer or promo balance?
Enter 0 as the APR and note the promo end date. When it ends, change the APR to the regular rate. With a deferred interest offer, the CFPB warns you can owe all the interest back to the purchase date if the balance is not paid off in time, so clear it before the deadline.
How accurate is this, and what if my minimum payment changes?
It is an estimate. Interest is figured monthly while many issuers charge daily, so statements can differ by a few dollars. If you will pay less than you entered, type the lower amount into Minimum payment and your debt-free date moves later.
Sources: Gal and McShane, Can Small Victories Help Win the War?, Journal of Marketing Research 49(4), 2012; CFPB on deferred interest, how card interest is calculated and minimum payment warnings. Estimates only, not financial advice.