Debt Payoff Priority Calculator
Compare the debt avalanche vs snowball payoff methods side by side.
Enter balances, rates, and minimums to see which strategy saves more money and time.
How Debt Payoff Priority Works
Two popular strategies govern debt payoff order: Avalanche (highest interest first) and Snowball (smallest balance first). Avalanche saves the most money; Snowball provides faster psychological wins.
Avalanche method (mathematically optimal):
- List all debts by interest rate, highest first
- Pay minimums on all debts
- Direct all extra money to the highest-rate debt
- When paid off, roll that payment to the next highest rate
Interest cost formula:
Monthly Interest = Balance × (Annual Rate ÷ 12)
Worked example — Avalanche:
| Debt | Balance | Rate | Min Payment | Monthly Interest |
|---|---|---|---|---|
| Credit card | $5,000 | 24% | $100 | $100 |
| Car loan | $12,000 | 7% | $220 | $70 |
| Student loan | $18,000 | 5.5% | $195 | $82.50 |
Extra available cash: $200/month → Add to credit card first ($300 total).
The credit card at 24% costs $1,200/year in interest — attacking it first saves the most.
Snowball method:
Same situation — pay minimums everywhere, extra money to smallest balance (credit card $5,000 first in this case — happens to match Avalanche here). If the car loan were $3,000 instead, Snowball would attack that first for a faster payoff win.
Hybrid approach:
Pay off any debt above 10% using Avalanche. Below 10%, consider investing surplus in index funds instead — long-run returns of 7–10% may exceed the interest cost of low-rate debt.
Payoff timeline formula:
Months to payoff = −ln(1 − (Balance × r ÷ Payment)) ÷ ln(1 + r)
Where r = monthly rate. This is exact for fixed-payment loans.