Debt Payoff Calculator - Snowball vs Avalanche

Snowball vs Avalanche: Which Debt Payoff Strategy Wins?

Both strategies work the same way: you pay the minimum on every debt each month, then direct your entire extra budget at one target debt until it is gone, and roll its freed-up minimum payment into the next target. The only difference is the order. The snowball method targets the smallest balance first, the avalanche method targets the highest APR first.

Mathematically the avalanche always wins or ties, because every extra unit of money kills the most expensive interest first. On a typical mix, say a 3,500 credit card at 21% APR, a 9,000 car loan at 7.5%, and a 1,500 personal loan at 12%, with 200 extra per month, the difference is usually a few hundred in interest over the payoff period. The snowball's advantage is behavioral: clearing the 1,500 loan in a few months gives a quick win, and research on debt repayment consistently shows people stick with a plan longer when they see accounts closing early.

The simulation here compounds interest monthly (APR divided by 12), applies minimums, then allocates the extra budget by strategy. It also flags a dangerous situation many calculators ignore: when a minimum payment is lower than the monthly interest, that balance grows every month, and no payoff order fixes it until the payment rises. If you see that warning, prioritize renegotiating that debt or raising the extra budget above the interest gap.

The output is an indication, not financial advice: real credit cards compound daily, minimum payments often shrink as a percentage of the balance, and loans can carry prepayment penalties or fees. Use the comparison to choose a direction, then verify against your actual statements. For a single loan's exact amortization schedule, the Loan Calculator breaks down every payment, and the Budget Planner helps find the extra monthly amount in the first place.