Debt Payoff Calculators

Both methods are rules for a single number. Add up the minimum payments on every debt, subtract that from what you can put toward debt each month, and what is left is the surplus. The snowball sends the whole surplus to the smallest balance; the avalanche sends it to the highest rate. Under both, every open debt goes on receiving its own minimum the entire time, including the one at the bottom of the order. The ordering decides where the surplus lands and nothing else, which is also the ceiling on how much the choice can possibly be worth.

The avalanche can never cost more interest than the snowball on the same inputs. A dollar put against a 24% balance stops twice as much interest as the same dollar against a 12% one, so directing the surplus by rate is the arithmetically optimal order, and the engine is tested on ten thousand random sets of debts to confirm that the highest-rate plan never returns a larger interest total. It can tie, and there are exactly two ways to tie: a surplus of zero, where there is nothing to order, and a set of debts where the two rules name the same sequence. The four debts on the debt payoff calculator are the second case — the smallest balance is also the dearest, and the balances rise in exactly the order the rates fall — so both methods return 34 months and $5,130.95 of interest, to the cent.

Where the two do differ, the difference is smaller than the argument about it. Take the three debts this section uses throughout: a $1,500 store card at 8.000% with a $40 minimum, a $4,000 credit card at 24.000% with a $100 minimum, and a $7,000 car loan at 12.000% with a $150 minimum, against a $600.00 monthly budget. The snowball finishes in 25 months having paid $2,035.58 of interest; the avalanche finishes in 24 months having paid $1,785.39. The whole ordering decision is worth $250.19 and one month, which across the life of that plan is $10.01 a month. It shrinks as the rates close up: hold the balances and the budget and set the rates to 9%, 18% and 12% and the gap falls to $141.80; at 10%, 14% and 12% it is $68.27 and both plans finish in the same 24 months; with all three rates equal the two plans are identical row for row.

The size of the budget decides far more than the ordering does. The same three debts on their minimums alone — $290.00 a month, the sum of the minimums, no surplus at all — take 66 months and cost $6,377.95 in interest, identically under both methods. Raising the budget to $600.00 brings that to $2,035.58 under the snowball: the extra $310.00 a month is worth $4,342.37 and 41 months, seventeen times what the choice of ordering was worth. The comparison holds much further down as well. Add ten dollars a month to that minimums-only plan, a $300.00 budget, and the same three debts clear in 62 months for $5,973.35 — $404.60 and four months saved by ten dollars, which is more than the entire snowball-against-avalanche gap at twice the budget. The snowball page and the avalanche page each fix one ordering and print what it costs against the other; the planner runs both at once on the same debts.

A single-loan page answers when one balance ends. With several balances the payments interact, and the interaction is the whole of what a planner computes. Each debt is charged its own interest on its own rate, every minimum is paid, the surplus goes to one target, and when that target reaches zero its minimum is not retired along with it — the money joins the surplus and moves to the next debt.

The freed minimum moves in the month it is freed, not the month after. In month five of the snowball plan above, the store card owes $127.17; its own $40.00 minimum covers part of that and $87.17 of the $310.00 surplus finishes it. The remaining $222.83 does not wait for month six. It reaches the credit card in the same month and ends it at $3,673.09, so that month closes with balances of exactly $0.00, $3,673.09 and $6,591.92. A planner that reserves a closed debt's minimum, or holds the leftover surplus until the next cycle, leaves $222.83 idle for four weeks and then disagrees with this one in every month that follows.

The two planner pages differ in what they lead with rather than in what they compute. The debt payoff planner puts the two orderings side by side and leads with the difference between them. The debt payoff calculator leads with the debt-free date for the whole set and defaults to four debts rather than three. Both show the month each individual balance closes, which is usually the figure people came for and rarely the one they get.

A credit card minimum is not a fixed amount. Under the common rule — the larger of $25.00 and this month's interest plus 1% of the balance — it falls every month as the balance falls, which is why minimum-only payoff takes as long as it does. A $5,000.00 balance at 24.000% clears in 234 payments and costs $8,886.94 in interest under that rule. A flat $150.00 a month, which is exactly what the first minimum payment would have been, clears the same balance in 56 payments and $3,322.17. The credit card page runs the issuer's rule month by month, because a payment that changes every month has no closed form to solve.

The same shape shows up across a set of debts. On the $290.00 minimums-only plan above, $3,669.79 of the $6,377.95 in interest is accrued by the 24% card alone, and that card is the last of the three to close, in month 66 — not because of any ordering decision, but because $100.00 a month against a $4,000 balance at that rate barely moves it. The whole plan pays $18,877.95 to clear $12,500.00 of balances.

One caveat runs the other way. The planner treats each minimum as a fixed amount for the life of the plan, while a real card minimum shrinks as the balance does. For any debt that is not the current target, a fixed minimum is therefore slightly optimistic — it pays down a little more principal than the real rule would. The credit card page models the percentage rule; the planner does not.

Nothing here is a lender, an offer or a recommendation. There are no rates on file, no products, and no view about what anyone should do with the figures. Interest is charged once a month on each balance at that balance's own rate, so a card that compounds daily will charge a little more than the plan shows. Rates, minimums and the monthly budget are held constant for the length of the plan, and nothing new is borrowed against any balance while it runs — new spending on a card that is still open is the ordinary reason a real plan takes longer than a computed one.

Where a plan cannot run, the page says so instead of producing a number that looks like an answer. A budget below the minimums is reported as a shortfall — $250.00 against $290.00 of minimums is $40.00 short — and nothing else renders. Nothing typed on any of these pages is transmitted, there are no accounts and no saved plans, and nothing is kept between visits; a plan that has to survive the tab closing survives as a link, and that link carries the balances, rates, minimums and budget but never the labels. The formulas, the rounding rule and the published test vectors every figure on this page was checked against are on the methodology page.