How to plan your debt payoff
- List each debt on its own line: a name, then the balance, the APR and the minimum payment, like Visa 4,500 18.9% 120. You can paste rows from a spreadsheet.
- Enter the Extra each month you can pay on top of all the minimums, and pick Avalanche (highest rate first) or Snowball (smallest balance first).
- Read your debt-free date, the total interest and the order the debts get paid off, with a date for each. The results also compare the other method and paying with no extra.
How the plan is worked out
Each month the calculator adds interest to every debt, pays every minimum, then puts the rest of your monthly budget (all the minimums plus the extra) on the first debt in the order. When that debt reaches zero, the money that was going to it moves to the next one. The total you pay each month never changes, so the payments get bigger on each debt as you go. People call this the debt snowball because it grows as it rolls.
The two methods only differ in the order:
| Method | Pays first | Good for |
|---|---|---|
| Avalanche | Highest APR | Paying the least interest |
| Snowball | Smallest balance | Quick wins that keep you motivated |
If your debts with the highest rates also have the smallest balances, both methods give the same order and the same result.
Getting the most from a payoff plan
Use your real minimum payments and APRs from your latest statements, and update the list every few months as the balances change. Keep the extra payment going even after you clear a big debt, since that’s when the plan speeds up most. If one debt has a 0% promotional rate, it will land at the end of the avalanche order; check when the offer ends so it doesn’t start charging interest before you reach it. For a single card, the credit card payoff calculator shows the payment needed to clear it by a set month.