How this works
When you have multiple debts, you can dump every spare dollar at one of them and pay only the minimums on the rest. Two strategies decide which debt comes first. Snowball pays off the smallest balance first — fast wins build motivation. Avalanche pays off the highest-interest-rate debt first — saves the most money mathematically. Add each of your debts (balance, APR, minimum payment), set the extra you can afford monthly, pick a method, and the simulator runs the months until everything is cleared, showing total interest paid and which debt clears first.
The formula
A simple month-by-month simulation rather than a closed form — the cascading payoff means each month's state depends on the previous one. Capped at 600 months (50 years) to detect plans where the minimums never close out.
Example calculation
- Three debts: Credit Card $4,500 @ 22% / $90 min, Student Loan $12,000 @ 6.5% / $140 min, Car Loan $8,000 @ 8% / $180 min. Extra $200/month.
- Avalanche prioritises the credit card first (highest APR), then the auto loan, then student loan. Total payoff ~37 months.
- Snowball clears the credit card first (smallest balance), then car loan, then student loan. About 1 month longer overall and ~$300 more interest, but the first win comes sooner.
Frequently asked questions
Snowball or avalanche — which should I pick?
Avalanche is mathematically optimal — fewer total interest payments, faster overall payoff. Snowball is psychologically optimal — clearing a small debt fast is a real motivation boost. Research suggests people who use snowball stay on the plan longer, even though it costs slightly more. Pick avalanche if you'll grit through it; pick snowball if you need momentum.
What if I can't afford even the minimums?
Stop optimising and start triaging. Talk to a non-profit credit counsellor (NFCC in the US, StepChange or Citizens Advice in the UK, INFE in Spain). Options include a debt management plan, hardship programs from your lenders, or — in extreme cases — formal insolvency procedures. Don't ignore the problem; lenders are usually willing to negotiate when you call them first.
Should I consolidate all my debts into one loan instead?
Consolidation works when the new loan's rate is meaningfully lower than the weighted average of your current rates and you don't add to the balance afterwards. Personal loans for consolidation typically run 8–15%, beating credit cards (18–30%) but not student loans (4–7%). Run the numbers — sometimes consolidation just resets the timeline and adds origination fees without saving you money.
Why is the simulator capped at 600 months?
50 years. If your plan would take longer than that — usually because the minimum payments don't cover the interest charges on a high-rate debt — the calculator stops and flags the plan as unpayable. Increase the extra-payment field to make the situation tractable, or look at consolidation.