Debt Payoff Planner — Snowball vs Avalanche
List your debts, set a total monthly payment, and see your debt-free date under both the snowball and avalanche strategies.
Payoff comparison
The avalanche method saves you $0 in interest compared to snowball.
Snowball vs avalanche — which should you pick?
Both methods use the same idea: pay the minimum on every debt, then throw everything else at one target debt. When that target is paid off, roll its payment onto the next one. The only question is which debt is the target.
- Snowball targets the smallest balance first. You'll knock out a debt in weeks or months, which feels great and keeps you motivated. Recommended if you've tried to pay off debt before and lost steam.
- Avalanche targets the highest interest rate first. Mathematically optimal — you save more money and get out of debt slightly faster. Recommended if you're motivated by numbers and won't quit.
In most real-world scenarios the difference between the two is a few hundred to a few thousand dollars — meaningful, but not enough to overrule the strategy you'll actually stick with. Pick the one you can execute.
The rules that make either method work
- Stop adding to the debt. No new charges on cards you're paying off. This is the hardest part.
- Pay the minimum on every debt every month. Missing a payment triggers penalty APRs (often 29%+).
- Send everything else to your target debt. Not spread across all of them — one target.
- Roll payments forward. When a debt is paid off, add its payment to the next target's payment. This is what compounds your progress.
FAQ
What's the difference between snowball and avalanche?
The debt snowball orders debts smallest-balance first — you get quick wins that build momentum. The debt avalanche orders debts highest-interest-rate first — you pay less total interest. Both work; snowball wins on psychology, avalanche wins on math. If your interest rates are close, the difference is small.
Should I pay off debt or invest?
Any debt above ~7-8% interest almost always beats investing (because paying it off is a guaranteed after-tax return). Below that — student loans, mortgages — it depends on rate, risk tolerance, and whether you'd actually invest the difference. Always capture any 401(k) match first: that's a 100% return.
What is the 'minimum payment' on a credit card really costing me?
Card minimums are typically 1-3% of the balance. On a $5,000 balance at 24% APR, paying the minimum takes over 20 years and costs ~$8,000 in interest. Paying anything above the minimum dramatically shortens the payoff.
What if I can't afford my minimums?
Call each creditor before missing a payment — many have hardship programs. A non-profit credit counselor (find one at NFCC.org) can negotiate lower rates. Avoid for-profit 'debt settlement' companies that tank your credit and often make things worse.