Loan payoff calculator: snowball vs. avalanche.
Two well-known debt payoff strategies, simulated on your actual debts, side by side. See exactly how much interest each one costs and how long it takes, then pick the one you'll actually finish.
Your debts
Sum of your minimum payments is the floor. Anything extra goes toward the focus debt for each strategy.
Following avalanche (highest APR first), every balance hits zero in 2 yr 5 mo. Snowball (smallest balance first) gets you there in 2 yr 5 mo.
· Smallest balance first
Snowball
Best for momentum and motivation.
- Months to free
- 2 yr 5 mo
- Total interest
- $2,482
Payoff order
- 1. Credit Card Bmonth 4
- 2. Credit Card Amonth 17
- 3. Car Loanmonth 29
· Highest APR first
Avalanche
Mathematically optimal, least total interest.
- Months to free
- 2 yr 5 mo
- Total interest
- $2,409
Payoff order
- 1. Credit Card Amonth 14
- 2. Credit Card Bmonth 17
- 3. Car Loanmonth 29
The verdict.
Avalanche saves you about $73 in interest and finishes around the same time. But snowball gives you the first 'paid off!' moment sooner, which is real fuel for sticking with it. Pick the one you'll finish.
Every month, each debt accrues interest at its own APR, then its minimum payment is applied. With $700 a month total, whatever is left after the minimums goes to one focus debt.
Monthly interest = balance * (APR / 12 / 100) Leftover budget = total monthly budget - sum of minimums
Avalanche sends the leftover to the highest-APR debt first; snowball sends it to the smallest balance first. When a debt is cleared, its minimum rolls into the leftover for the next focus debt.
Focus debt (avalanche) = highest APR still open Focus debt (snowball) = smallest balance still open
Run both rules month by month until every balance reaches zero. Avalanche finishes in 2 yr 5 mo with $2,409 of interest; snowball finishes in 2 yr 5 mo with $2,482.
Interest avalanche saves = $2,482 - $2,409 = $73
Avalanche is always at least as cheap on interest. The behavioral edge of snowball (an early payoff win) does not show up in these dollar figures.
The human strategy.
Pay the minimum on every debt, then dump all extra money on the smallest balance. When that one is gone, roll its payment onto the next-smallest. The fact that you "killed" a whole debt feels like a win, and that win is fuel for staying disciplined for the longer ones.
Personal finance educator Dave Ramsey popularized snowball because, in his experience, more people finish with snowball than with the mathematically optimal strategy. He's probably right for many people.
The math strategy.
Pay the minimum on every debt, then dump all extra money on the highest-APR debt. When that one is gone, roll its payment onto the next-highest APR. This minimizes total interest. Always.
The catch: if your highest-APR debt is also your largest, you may not feel a "win" for many months. Some people find that draining and quit. If you'd quit, snowball is better for you, even though the math is "worse."
Which one you'll actually finish.
The actual interest difference between snowball and avalanche is often smaller than people expect, typically a few hundred to a couple thousand dollars over a multi-year payoff. The bigger variable is which one you'll stick with for 24+ months.
Try both in the calculator above. If avalanche saves you thousands and you have the discipline, take it. If the gap is small, take whichever feels easier. That's the one you'll finish.
The hybrid.
Some people combine both: pay off the smallest balance first (one quick win), then switch to avalanche from there. The calculator above doesn't simulate this, but you can model it manually by removing the smallest debt and running avalanche on what's left.
Assumptions
- APRs are constant for the life of each debt. Variable-rate debt (most credit cards) actually changes when the prime rate moves.
- You make the minimum payment plus any extra every month, on time. Missed payments are not modeled.
- Minimum payments are the fixed dollar amounts entered, not the typical 1 to 2 percent-of-balance formula credit card issuers use.
- No new debt is added during the payoff. Adding new charges breaks the math.
- No late fees, no balance-transfer fees, no promo-rate expirations.
Limitations
- Credit card minimum payments in reality scale with balance (typically 1 to 3 percent or $25 minimum, whichever is greater). Holding the minimum constant overstates how fast a card kills itself early on.
- The calculator does not model balance transfers, debt consolidation loans, or refinancing.
- Tax-deductibility of mortgage or student loan interest (when applicable) is not modeled.
- Behavioral effects (snowball's quick-win discipline benefit) are not in the dollar numbers; that is exactly the trade-off the snowball strategy makes.
- It is not personalized debt advice or a recommendation between snowball, avalanche, or any other strategy.
- It is not a credit-counseling tool. For severe debt situations, talk to a non-profit credit counselor (NFCC).
- It is not legal advice on debt collection, settlement, or bankruptcy.
- It is not a recommendation about specific lenders, balance-transfer cards, or consolidation loans.
Four rules that never change.
Always pay the minimum on every debt. Missing a minimum payment torpedoes your credit score and triggers late fees.
The "extra" goes to one place. Splitting extra across multiple debts dilutes the strategy and slows everything down.
Don't add new debt while paying down. The math falls apart if balances keep growing.
Celebrate paid-off debts. They're real milestones. Mark them.
Try a balance transfer.
If you have good credit, a 0% APR balance transfer card (typically 12 to 21 months interest-free, with a 3 to 5 percent transfer fee) can save serious money, but only if you actually use the runway. Otherwise the rate jumps and you've added a fee for nothing.
A note on how this was made. Lessons, glossary entries, and articles on ClearMoneySchool are drafted with AI assistance and reviewed by Joseph Citizen before publication. We use AI to draft faster and explain more clearly. We do not use it to publish anything we have not read, fact-checked, and edited. Read our full AI policy.
Education only, not personalized debt advice. We do not recommend specific lenders or balance transfer cards. ClearMoneySchool does not provide personalized financial advice. See the about page for why we don't give advice.