Snowball vs Avalanche Calculator

Reviewed by: David Chen, CFA.

Compare the Debt Snowball and Debt Avalanche payoff methods to determine which strategy will save you the most money and time, using your actual debt details.

Debt Snowball vs Avalanche Calculator

Debt Details (Up to 3 Debts)

Extra Payment

Debt Avalanche

Interest Saved:

Time to Payoff:

Debt Snowball

Interest Paid:

Time to Payoff:

Winner:

Detailed Month-by-Month Simulation

Debt Repayment Formula

The total payoff time for a single debt is typically calculated using an amortization formula. However, since the Snowball and Avalanche methods involve dynamically reallocating payments, the overall payoff is best calculated using an iterative, month-by-month simulation. The underlying principle is based on the constant payment formula:

$$ N = -\frac{\ln(1 – \frac{rV}{P})}{\ln(1+r)} $$ Where:
$N$ = Total number of payments (months)
$r$ = Monthly interest rate (APR/12)
$V$ = Initial principal (Balance)
$P$ = Fixed monthly payment

Formula Sources: Investopedia, NerdWallet

Variables Explained

• Debt Balance ($): The current outstanding principal amount for the loan or credit card.
• Annual Rate (%): The Annual Percentage Rate (APR). This is converted to a monthly rate for calculation.
• Min Payment ($): The minimum required monthly payment for the specific debt.
• Extra Monthly Payment ($): The additional amount you commit to pay each month, which is the key driver of both Snowball and Avalanche acceleration.

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• Loan Amortization Schedule Calculator
• Compound Interest Growth Calculator
• Credit Card Payoff Estimator

What is Debt Snowball vs Avalanche?

The Debt Snowball and Debt Avalanche are the two most popular methods for accelerating debt repayment. Both methods require committing an “extra payment” amount each month. The difference lies in how that extra money, plus the minimum payments from debts that have been paid off, is allocated.

The **Debt Avalanche** method focuses purely on mathematics. You prioritize paying off the debt with the highest interest rate first, regardless of the balance size. This results in paying the least amount of total interest and the fastest overall payoff time, making it the most financially efficient method.

The **Debt Snowball** method focuses on behavior and motivation. You prioritize paying off the debt with the smallest outstanding balance first, regardless of the interest rate. Once the smallest debt is paid off, the payment amount (minimum payment plus any extra payment) “snowballs” into the next smallest debt. While it typically costs more in total interest than the Avalanche, the early wins can provide psychological momentum to stick with the plan.

How to Compare Debt Repayment Methods (Example)

Follow these steps to compare the two methods using your current debts:

1. List All Debts: Gather the balance, annual interest rate (APR), and minimum monthly payment for every debt you want to include in the plan.
2. Determine Extra Payment: Decide on a consistent extra monthly amount you can afford to put toward debt (the acceleration payment).
3. Simulate Avalanche: Systematically apply the combined extra payment toward the debt with the highest interest rate first until it is paid off. Then, roll the full payment amount (original minimum payment + extra payment) to the next highest interest rate debt.
4. Simulate Snowball: Systematically apply the combined extra payment toward the debt with the smallest balance first until it is paid off. Then, roll the full payment amount (original minimum payment + extra payment) to the next smallest balance debt.
5. Compare Results: Compare the total interest paid and the total time required for both simulations. The Avalanche method will generally save more money, but the Snowball may motivate you to finish faster.

Frequently Asked Questions (FAQ)

• Is the Debt Avalanche method always better financially? Yes. Because the Avalanche method attacks the debt that costs you the most money (the highest interest rate) first, it mathematically guarantees the lowest total interest paid and the shortest payoff time.
• Why would someone choose the Snowball method? The Snowball method offers quick wins by eliminating small debts quickly. This psychological boost—the ‘snowball’ effect—can be crucial for people who need momentum or struggle with sticking to a long-term plan.
• Does this calculator work for all types of debt? Yes. The underlying math (amortization) applies to any type of revolving or installment debt, including credit cards, student loans, and personal loans, provided you have the balance, rate, and minimum payment.
• What happens to the minimum payment of a paid-off debt? In both methods, once a debt is paid off, the money that used to go toward that debt’s minimum payment is immediately added to the acceleration payment for the next targeted debt. This is how the “snowball” or “avalanche” of payments grows.