Purpose and steps
Pay each active debt’s minimum first. Snowball directs remaining budget to the smallest balance; avalanche targets the highest APR. Cleared debt payments and unused payoff money roll to the next debt. The calculation runs locally and keeps cash-flow timing consistent with the stated assumptions.
- Confirm currency and monthly versus annual amounts. U.S. tax and loan models should be used within their stated scope.
- Prepare Extra monthly debt budget, Minimum payment floor per debt. Defaults demonstrate the model rather than your personal circumstances.
- Check the headline result and its components. A key interpretation for this tool is: Snowball can create earlier small wins; avalanche usually prioritizes interest efficiency.
- Compare the baseline with a changed scenario: The minimum-only comparison deliberately does not recycle cleared minimum payments.
Input reference and units
These values reproduce the model’s demonstration. Replace them with your own records or measurements; they are not recommended targets.
On a small screen, swipe the table horizontally to see all columns.
| Parameter | Demonstration value | How to enter it |
|---|---|---|
| Extra monthly debt budget | 200 USD | Use dollars and the monthly or annual period stated in the field label; do not enter thousands of dollars. |
| Minimum payment floor per debt | 0 USD | Use dollars and the monthly or annual period stated in the field label; do not enter thousands of dollars. |
Model-specific method
How this calculator produces its result
Pay each active debt’s minimum first. Snowball directs remaining budget to the smallest balance; avalanche targets the highest APR. Cleared debt payments and unused payoff money roll to the next debt.
Annuities and the remaining-balance recurrence
A fixed-payment loan is an annuity: the discounted value of all future payments equals the amount borrowed today. Summing that geometric series gives the monthly-payment equation. Match the rate and time unit: monthly payments use an annual nominal rate divided by twelve and a term counted in months.
Each payment is split into interest and principal. Interest uses the opening balance, so paying extra principal now reduces later interest. A zero rate must use P/n rather than the formula’s zero-over-zero form. Keep full precision during the schedule and round only for display; a lender may round each actual posting differently.
P = Σ[t=1…n] M/(1+r)^t M = Pr / (1 − (1+r)^−n) Iₜ = Bₜ₋₁r; Bₜ = Bₜ₋₁ + Iₜ − paymentₜ
- P: principal today
- r: rate per payment period, not the annual percentage
- n: number of payment periods
- M: scheduled payment; B: remaining balance
Worked example
A $5,000 card at 22% with a $150 minimum and a $10,000 loan at 8% with a $200 minimum, plus $200 extra, produce a $550 monthly rollover budget until all debts are cleared.
Reproduce the default scenario
This is a separate example, calculated using the exact engine on the tool page and the defaults in the input reference above. Health examples use metric units. Displayed rounding may differ from intermediate precision.
- 5000 USD · 22% APR · 150 USD/month
- 10000 USD · 8% APR · 200 USD/month
- Avalanche interest saved vs snowball
- 0 USD
- Snowball payoff time
- 32 months
- Avalanche payoff time
- 32 months
- Snowball total interest
- 2,250.2 USD
- Avalanche total interest
- 2,250.2 USD
- Minimum-only payoff time (no rollover)
- 62 months
- Minimum-only interest
- 5,002.52 USD
- Monthly rollover budget
- 550 USD
Reading results without overstating them
- Snowball can create earlier small wins; avalanche usually prioritizes interest efficiency.
- The minimum-only comparison deliberately does not recycle cleared minimum payments.
Assumptions and exclusions
- Uses fixed minimum amounts and monthly interest, no new borrowing, fees, promotions or changing contractual minimums. Results assume the rollover budget stays available every month.
Sources and content notes
Toolify describes the implemented algorithm and its assumptions. Sources below support the topic or applicable rules; they do not endorse this calculator. Examples are illustrative, and published rules take precedence over simplified estimates.
Report a formula, example or translation issue through our contact page. Include the tool name, inputs and expected result so it can be reproduced. Contact Toolify