How to use the Debt Payoff
- List each debt with its balance, interest rate and minimum payment.
- Enter the total you can pay each month across all of them.
- Choose avalanche or snowball ordering.
- Compare the payoff dates and total interest under both.
How the calculation works
Both methods pay the minimum on every debt and direct all surplus at one target. Avalanche targets the highest interest rate, which is mathematically optimal and always produces the lowest total interest. Snowball targets the smallest balance, clearing individual debts sooner and producing visible wins that help people stay with the plan.
As each debt clears, its payment rolls into the next target, so the amount attacking the remaining balances grows month by month — that acceleration is what makes either method dramatically faster than paying minimums. Minimum payments on revolving credit are typically set as a small percentage of the balance, which falls as the balance falls, stretching repayment across decades if you never pay more.
Each month: pay minimums, apply surplus to the target debt; interest = balance × APR/12; roll cleared payments forwardSource: Standard revolving-credit amortisation; avalanche and snowball ordering as described in consumer finance guidance.
Worked example
Three debts — 2,400 at 24.9%, 7,800 at 18.4%, 4,100 at 9.9% — with 620 a month available.
- Minimums total roughly 340, leaving 280 surplus.
- Avalanche targets the 24.9% card first, clearing it in about 8 months.
- Its payment then rolls to the 18.4% balance, which clears around month 26.
- Snowball would instead clear the 2,400 first as well here, since it is both smallest and dearest.
About 31 months and roughly 2,950 in interest under avalanche — around 190 less than snowball ordering on this mix.
Frequently asked questions
Which method should I choose?+
Avalanche costs least. Snowball clears individual debts faster and is worth the small extra cost if the early wins keep you going — the plan you finish beats the one you abandon.
Should I consolidate instead?+
Only if the consolidated rate, including fees, is genuinely lower and you stop adding to the cleared cards. Consolidation that frees up credit you then reuse makes things worse.
Why do minimum payments take so long?+
They are set as a small percentage of the balance, so they shrink as the balance does. On a high-rate card, minimums alone can take twenty years or more to clear.
Should I pay debt or build savings first?+
Hold a small emergency buffer so a surprise does not push you back onto credit, then attack high-rate debt hard. Rates above about 10% almost always beat what savings earn.
Last reviewed August 31, 2026. We review this page whenever the underlying formula, tax year, published rate or standard changes.