Debt Payoff Calculator
Plan paying off several debts and compare the avalanche and snowball methods by time and interest.
Interest saved with avalanche
Avalanche (highest rate first)
Snowball (smallest balance first)
When each debt is cleared
| Debt | Cleared (avalanche) | Cleared (snowball) |
|---|---|---|
| Credit card | Month 8 | Month 9 |
| Personal loan | Month 22 | Month 22 |
| Small loan | Month 9 | Month 2 |
Months are counted from your next payment.
How it works
Every month, for each debt still open:
Interest = Balance × yearly rate ÷ 12 ÷ 100 · Balance = Balance + Interest − Minimum payment
Then the rest of your monthly budget goes to the target debt:
Monthly budget = Sum of all minimum payments + Extra payment
- Avalanche: targets debts from the highest rate to the lowest.
- Snowball: targets debts from the smallest balance to the largest.
When a debt is cleared, its minimum payment stays in the budget and goes to the next target. The last payment on each debt is only what is left. Interest saved = snowball interest − avalanche interest.
Worked example
One debt, by hand: ₹12,000 at 12% a year, paying ₹1,000 a month.
- Monthly rate = 12 ÷ 12 ÷ 100 = 0.01, so month 1 interest = ₹12,000 × 0.01 = ₹120
- After month 1: ₹12,000 + ₹120 − ₹1,000 = ₹11,120
- Months needed = −ln(1 − ₹12,000 × 0.01 ÷ ₹1,000) ÷ ln(1.01) = 12.85, so 13 months
- Total interest = ₹847.79
Two debts: a card of ₹10,000 at 24% (minimum ₹500) and a loan of ₹5,000 at 12% (minimum ₹300), with ₹1,000 extra a month.
- Avalanche targets the card first: debt-free in 9 months, interest ₹1,188.43
- Snowball targets the smaller loan first: debt-free in 10 months, interest ₹1,429.50
- Avalanche saves ₹241.07 here.
Frequently asked questions
What is the difference between the avalanche and snowball methods?
Both pay the minimum on every debt and put all extra money on one target debt at a time. Avalanche targets the debt with the highest interest rate first; snowball targets the smallest balance first. When a debt is cleared, its minimum payment is added to the money going to the next target.
Which method saves more money?
Avalanche usually costs less interest, because the most expensive debt shrinks first. Snowball can clear individual debts sooner, which some people find motivating. The calculator shows the interest and time for both so you can choose.
How does the calculator work month by month?
Each month it adds interest (yearly rate ÷ 12) to every debt, pays each debt's minimum, then sends your extra payment plus any freed-up minimums to the target debt, and then to the next one. Your total monthly payment stays the same until all debts are cleared.
What if my payments do not cover the interest?
If the total you pay each month is less than the interest being added, the debts never get paid off. The calculator shows an error in that case. Raise the extra payment or the minimum payments until the debts start to fall.
What should I enter as the minimum payment?
Enter the minimum amount due each month from your statement or loan schedule, such as the EMI for a loan or the minimum due on a credit card. Minimum due rules vary by lender, so use the figure your lender shows.
Does this include fees, penalties or rate changes?
No. It assumes each rate stays the same and there are no new purchases, late fees or charges. Real balances can change, so update the inputs from your statements every few months.
Should I stop investing to pay off debt?
That depends on the interest rates and your situation. Paying off a high-interest debt is a guaranteed saving of that rate, which is hard to beat with investments. Many people keep a small emergency fund while they pay down expensive debt.