Two proven ways to kill debt
Every debt payoff plan pays the minimum on everything; the strategies differ only in where the extra money goes. The avalanche method aims extra payments at the highest APR — mathematically optimal, it always produces the lowest total interest. The snowball method aims at the smallest balance — each debt that vanishes frees its minimum payment and delivers a motivational win. This calculator simulates your debts month by month under either strategy, and shows the other strategy's result alongside, so you can see the exact price (or saving) of choosing motivation over math.
How the simulation works
When a debt dies, its freed minimum joins the extra pool and rolls onto the next target — the "snowball" that gives the second method its name (avalanche uses the same roll-over). The simulation is honest about interest: balances grow by APR ÷ 12 each month before payments land, exactly as statements do.
Making the plan actually happen
- Automate the minimums on every debt — late fees and penalty APRs wreck plans faster than interest does.
- Automate the extra payment too, aimed at the target debt, scheduled right after payday.
- Stop adding charges to any card in the plan; a plan cannot outrun new spending.
- Build a $1,000 starter emergency cushion first if you have none — otherwise the first car repair goes straight back on a card.
- Windfalls go to the target debt — tax refunds and bonuses are plan accelerants.
Worked example
One debt makes the math easy to check: a $1,000 balance at 12% APR with $100 monthly payments. Interest in month one is $10; the balance falls by $90. Month by month the interest shrinks — $9.10, $8.19, $7.27… — and the debt dies in 11 payments with total interest of just $58.98. Enter exactly that as Debt 1 (zeros for the others) to watch the simulator reproduce it.
How to use this calculator
- Enter each debt's balance, APR and minimum payment (up to three debts; leave unused ones at 0).
- Enter the extra amount you can truly add every month.
- Choose avalanche (cheapest) or snowball (fastest early wins).
- Note your debt-free date and total interest; check the comparison table for what the other strategy would do.
- Set up the payments today — the plan only works when it is automated.
When minimums don't cover interest
If a minimum payment is smaller than the month's interest, the balance grows even while you pay — the calculator flags this. Options: call the lender and ask about a hardship program or rate reduction, shift any available extra money to that debt first regardless of strategy, or speak with a nonprofit credit counselor (in the US, find one via the NFCC). Avoid for-profit "debt settlement" firms that charge upfront fees.