Two ways to attack multiple debts
When you have several debts and a fixed amount of extra money each month, the order you pay them off changes the outcome. The avalanche method directs every spare dollar to the debt with the highest interest rate first, which minimises the interest you pay overall. The snowball method instead targets the smallest balance first, clearing whole debts quickly for a psychological boost.
In both methods you keep paying the minimums on every debt; the extra payment is what gets steered to the priority debt. As soon as one debt is gone, the money that was feeding it rolls onto the next — the effect that gives the snowball its name and powers both strategies.
What the calculator simulates
The tool runs your debts through both methods month by month, accruing interest, applying minimums plus the shared extra payment, and rolling freed-up money forward as debts clear. It then reports how many months each method takes and how much total interest each one costs.
The bar chart places the two strategies side by side so you can see the interest difference directly, and the table adds the payoff timeline for each.
Choosing between them
Both are valid; the right one depends on what you need:
- Avalanche always pays the least interest and finishes at least as fast — it is the mathematically optimal choice.
- Snowball can cost a little more but delivers quick wins, which helps many people stay motivated and stick with the plan.
- The gap between the two is often small; if avalanche saves only a little, the momentum of snowball may be worth it.
- Whichever you choose, the size of the extra payment matters far more than the method.
Assumptions to keep in mind
The simulation assumes fixed rates, steady minimum payments, a constant extra payment and no new borrowing. Real debts may have variable rates or changing minimums, and adding new charges will lengthen any plan. Use the result to compare strategies, then revisit it as your balances change.
Formula
Each month: interest = balance·(APR/100/12); pay minimums + extra to the top-priority debt; roll cleared payments forward.Frequently asked questions
- Which method is better?
- The avalanche method always pays the least interest. The snowball method clears small debts faster, which some people find more motivating even if it costs a little more.
- Do I have to enter three debts?
- No. Leave any unused debt’s balance at zero and it is ignored.