Build a debt snowball plan: pay minimums on everything, put every extra dollar on your smallest balance, and roll each paid-off payment into the next debt. See your payoff order, debt-free date and total interest.
How the debt snowball works
- List your debts from the smallest balance to the largest, ignoring interest rates.
- Pay the minimum on every debt.
- Put every extra dollar toward the smallest debt until it is gone.
- Add the payment you were making on that debt to the next smallest one, so your payment "snowballs" as you go.
The calculator simulates this month by month, charging interest on each debt and automatically rolling freed-up payments into the next target.
Worked example
Four debts with a total budget of $800 a month (minimums add up to $565):
| Debt | Balance | APR | Minimum | Paid off (snowball) |
|---|---|---|---|---|
| Medical bill | $1,200 | 0% | $50 | Month 5 |
| Store card | $3,000 | 17.99% | $90 | Month 13 |
| Visa | $5,500 | 24.99% | $165 | Month 23 |
| Car loan | $8,000 | 6.9% | $260 | Month 26 |
All four are paid off in 26 months with about $3,023 in interest. Paying only the minimums would take 58 months and cost about $6,003.
Snowball or avalanche?
The snowball wins on motivation: you clear a whole debt within months, which keeps you going. The debt avalanche, which targets the highest interest rate first, usually saves more money. In this example it saves about $490 more interest. The best method is the one you will stick with.
Tips for a faster snowball
- Stop adding new debt. Use cash or debit while you pay down balances.
- Keep a small emergency fund so a surprise bill does not go on a card.
- Grow your budget. Raises, side income and refunds all speed up the snowball.
Frequently asked questions
Should my mortgage be in the snowball?
Most people leave the mortgage out and focus on consumer debts first. You can add it if you like.
What if two debts have similar balances?
Pay the one with the higher interest rate first. It makes little difference to motivation and saves money.
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Results are estimates for planning and education only. They are not financial, tax, legal or medical advice. Check important numbers with a qualified professional.