Debt Snowball Calculator Guide

The debt snowball method is a powerful psychological approach to eliminating debt by building momentum through quick wins.

How This Calculator Works

> [!IMPORTANT] > Why It Works: The snowball method isn't mathematically optimal, but it's psychologically powerful. Small wins create motivation that keeps you going.

This calculator compares two strategies:

Snowball Method - Pay smallest balance first
Avalanche Method - Pay highest interest rate first

The Two Methods Compared

Method	Priority	Best For
Snowball	Smallest balance first	Motivation & quick wins
Avalanche	Highest APR first	Minimum interest paid

Step-by-Step Example

Scenario: 3 Debts, $500/month Extra Payment

Debt	Balance	APR	Min Payment
Credit Card A	$2,000	22%	$50
Credit Card B	$5,000	18%	$100
Car Loan	$8,000	6%	$250

Snowball Order: A → B → Car (pays A first despite lower APR) Avalanche Order: A → B → Car (same, since A has highest APR too)

Frequently Asked Questions

Which method is better?

Avalanche saves money; Snowball builds momentum. Studies show most people do better with snowball because they stay motivated longer.

What if I can only make minimum payments?

Focus on increasing income or cutting expenses. Debt payoff requires paying more than minimums. Even $50 extra per month makes a significant difference.

Should I save while paying off debt?

Keep a small emergency fund ($1,000-$2,000) first. This prevents new debt when unexpected expenses arise. Then focus all extra money on debt payoff.

When does avalanche make more sense?

When rates differ significantly (e.g., 24% vs 5%) and balances are similar. The math strongly favors avalanche in these cases.

Key Points to Remember

Pick one method and stick with it
Make minimum payments on all debts
Attack the target debt with all extra money
Celebrate each payoff - it fuels motivation
Roll payments forward when debts are paid

Debt Strategy: Snowball vs. Avalanche

Inputs

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Calculated by CalcuFinance Team

Sources & References