Plan your way out of debt
Add each debt with its balance, interest rate and minimum payment, then any extra you can pay each month. The calculator builds a month-by-month plan and shows your debt-free date, the order your debts are cleared, the total interest, and a side-by-side comparison of the avalanche method, the snowball method and paying only the minimums.
How the plan works
Every month you pay the minimum on every debt and put the extra toward one target. When a debt is paid off, its minimum payment is added to the extra and moves to the next target. Your total monthly payment stays the same, but more of it goes to principal each time a debt disappears.
Avalanche or snowball?
- Avalanche targets the highest interest rate first. It always costs the least interest.
- Snowball targets the smallest balance first. You clear a debt sooner, and that early win keeps many people going.
The difference is often smaller than people expect. With a 6,000 dollar credit card at 24.99%, a 9,000 dollar car loan at 7% and a 1,200 dollar store card at 17.99%, plus 200 dollars extra a month, both methods finish in 29 months. The avalanche costs about 2,611 dollars of interest and the snowball about 2,733. Paying only the minimums takes 58 months and about 5,885 dollars. Choosing a plan and sticking to it matters far more than which plan you choose.
The minimum payment trap
Credit card minimums are designed to keep you paying. A 5,000 dollar balance at 22.99%, paid at a fixed 100 dollars a month, takes about 14 years to clear and costs about 11,700 dollars in interest. At 250 dollars a month it is gone in 26 months for about 1,370. Since the Credit CARD Act of 2009, US card statements must show how long minimum payments will take, which is worth reading once.
Making the plan work
- Stop adding new charges to the cards you are paying off, or the plan never ends.
- Keep a small emergency fund so a car repair does not go straight back on a card.
- Ask about a lower rate. A balance transfer card or a consolidation loan at a lower rate can shorten the plan, but count the transfer fees and do not treat the freed-up credit as spending money.
Estimates only, not financial advice. Assumes fixed rates, no new charges and the same total payment every month.