Compare High Rate (Avalanche) vs. Smallest Balance (Snowball)
Your Debts
Debt Snowball
–
Months to Debt Free
–
Total Interest Paid
Focus: Smallest Balance First
High Rate (Avalanche)
–
Months to Debt Free
–
Total Interest Paid
Focus: Highest Interest Rate First
function calculateStrategies() {
var errorBox = document.getElementById("errorBox");
var resultBox = document.getElementById("result");
errorBox.style.display = "none";
resultBox.style.display = "none";
// 1. Get Budget
var budget = parseFloat(document.getElementById("monthlyBudget").value);
if (isNaN(budget) || budget <= 0) {
errorBox.innerHTML = "Please enter a valid monthly budget.";
errorBox.style.display = "block";
return;
}
// 2. Gather Debts
var debts = [];
var totalMinPayment = 0;
for (var i = 1; i 0
if (!isNaN(bal) && bal > 0) {
if (isNaN(rate)) rate = 0;
if (isNaN(min)) min = 0;
debts.push({
id: i,
balance: bal,
rate: rate,
min: min,
origBalance: bal
});
totalMinPayment += min;
}
}
if (debts.length === 0) {
errorBox.innerHTML = "Please enter at least one debt with a balance.";
errorBox.style.display = "block";
return;
}
if (budget 1) {
banner.innerHTML = "The High Rate (Avalanche) method saves you $" + interestDiff.toFixed(2) + " in interest.";
} else if (interestDiff 0 && months < 1200) {
months++;
var availableForExtra = totalBudget; // Start with full budget
// 1. Calculate Interest for the month & Deduct Min Payments from Budget
for (var i = 0; i 0) {
// Monthly interest
var interest = debts[i].balance * (debts[i].rate / 100 / 12);
debts[i].balance += interest;
totalInterestPaid += interest;
// Pay minimum
var payment = debts[i].min;
// If balance is less than min, pay balance
if (debts[i].balance 0) {
for (var i = 0; i 0) {
var extra = availableForExtra;
if (debts[i].balance < extra) {
extra = debts[i].balance;
availableForExtra -= extra; // Partial usage of extra
debts[i].balance = 0;
// Continue to next debt with remaining extra
} else {
debts[i].balance -= extra;
availableForExtra = 0;
break; // All extra used
}
}
}
}
// Check how many are left
activeDebtCount = 0;
for (var i = 0; i 0.01) { // tolerance for float errors
activeDebtCount++;
}
}
}
return {
months: months,
totalInterest: totalInterestPaid
};
}
function formatMonths(m) {
var years = Math.floor(m / 12);
var months = m % 12;
if (years > 0) {
return years + " yr " + months + " mo";
}
return months + " mo";
}
Analyzing the Results: High Rate vs. Debt Snowball
When facing multiple sources of debt, such as credit cards, medical bills, or student loans, the order in which you pay them off significantly impacts your financial future. This calculator compares the two most popular debt payoff strategies: the High Rate Method (Avalanche) and the Debt Snowball Method.
1. The High Rate (Avalanche) Strategy
The High Rate method is the mathematically optimal way to get out of debt. The logic is based purely on the "cost of money."
How it works: You list your debts from the highest interest rate to the lowest interest rate.
The process: You pay minimum payments on all debts, and throw every extra dollar at the debt with the highest percentage rate.
The benefit: By attacking the most expensive debt first, you reduce the amount of compound interest that accrues over time. This usually results in paying less total interest and becoming debt-free slightly faster.
2. The Debt Snowball Strategy
The Debt Snowball method focuses on behavior modification and psychology rather than pure math. It was popularized by financial experts who believe quick wins keep you motivated.
How it works: You list your debts from the smallest balance to the largest balance, ignoring interest rates entirely.
The process: You pay minimums on everything, but focus all extra money on the smallest debt. Once that is paid off, you take what you were paying on it and roll it into the next smallest debt.
The benefit: You eliminate individual debts quickly. Seeing a debt disappear completely provides a psychological boost (dopamine hit) that encourages you to stick with the plan.
Which Strategy is Right for You?
The "correct" answer depends on your personality type:
Choose High Rate (Avalanche) if: You are disciplined, motivated by numbers, and want to save the maximum amount of money possible. You don't need quick wins to stay on track.
Choose Debt Snowball if: You feel overwhelmed by the number of debts you have. You need to see progress quickly to stay motivated. The psychological relief of closing an account is worth the small extra cost in interest.
How to Use This Calculator
Total Monthly Budget: Enter the total amount of money you can afford to pay toward debt every month. This must be higher than the sum of your minimum payments.
Enter Debts: Input the Balance, Interest Rate, and Minimum Payment for up to four different debts.
Compare: Click "Compare Strategies." The calculator will simulate the payoff schedule for both methods month-by-month.
Review Savings: Look at the "Total Interest Paid" and "Months to Debt Free." Often, the Avalanche method saves money, but the time difference might be negligible, helping you decide if the cost savings outweigh the psychological benefits of the Snowball.