Scope
Assumptions and limits
This is a planning tool, not debt counselling, financial advice or a change to contractual minimum payments.
Results use the values you enter and the conventions described in the methodology below. After calculating, review the result-specific assumptions and warnings shown with the estimate.
Explore money and debt tools for related tasks in this collection.
01
Snowball versus avalanche
Avalanche ordering prioritises the highest annual rate, breaking ties by smaller balance. Snowball ordering prioritises the smallest balance, breaking ties by higher rate. Custom mode follows input order.
With debts of 5,000 at 24% and 2,000 at 18%, minimums of 150 and 100, plus 200 extra, both strategies project 19 months. The specified fixture estimates 1,413.11 interest for snowball and 1,315.87 for avalanche.
02
How the payoff simulation works
Each month accrues interest, applies every fixed minimum, then sends remaining budget to the active target. When a target closes, same-month excess spills to the next debt and its freed minimum remains in the future monthly budget.
A single 10,000 balance at 18% with a 300 payment projects payoff in 47 months and 3,967.21 interest under the monthly model.
03
When payments are too low
If the payment does not exceed first-month interest, the calculator reports a non-repaying state rather than inventing a debt-free date. Simulations stop at 1,200 months.
Issuer daily interest, changing minimums, fees, new purchases, promotional rates and balance transfers are excluded.
FAQ
Frequently asked questions
What is the debt snowball method?
It directs extra payment to the smallest open balance.
What is the debt avalanche method?
It directs extra payment to the highest-rate open debt.
Which normally pays less interest?
Avalanche usually does under identical assumptions, but results depend on balances, rates and payments.
Can I include several credit cards?
Yes. The production engine supports up to 20; this initial interface shows two clear debt entries.
Does this affect my credit score?
No. It is a local planning calculation and does not contact credit bureaux.
Sources
Method references and scope
- Consumer Financial Protection Bureau — Reducing debt worksheet
- Federal Trade Commission — Coping with debt
Method: results come from tested code using the documented method and assumptions shown on this page.
Review owner: Great Future Product Engineering.
Method and content last reviewed: . Next review due: .