Debt Snowball Calculator Spreadsheet

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Reviewed by: David Chen, CFA. This calculator employs the standard Debt Snowball methodology to optimize debt payoff.

The Debt Snowball Calculator helps you determine your fastest debt payoff timeline and the total interest you can save by applying extra payments to your smallest debts first. Input your current debt balances, interest rates, minimum payments, and any additional monthly funds you can dedicate to accelerating your financial freedom.

Debt Snowball Calculator Spreadsheet

Payoff Summary (Debt Snowball Method)

Total Payoff Time:
Total Interest Paid:
Estimated Payoff Date:

Debt Snowball Calculator Spreadsheet Formula

The Debt Snowball method is an iterative process, not a single mathematical formula. The ‘formula’ is an algorithm that involves continuous recalculation:

Algorithm: 1. Sort Debts: Balance (smallest to largest). 2. Calculate Monthly Payment: Min Payments + Extra Payment. 3. Allocate Funds: Pay minimum on all debts. 4. Focus Payment: Apply all remaining funds (Extra Payment + freed-up minimums from paid-off debts) to the smallest debt. 5. Recalculate: Repeat steps 3-4 until all debts are paid off. Monthly Interest Calculation (per debt): $$ \text{Interest Paid} = \frac{\text{Principal Balance} \times \text{Annual Rate}}{12} $$

Formula Sources: Ramsey Solutions (The Snowball Method), Investopedia (Debt Snowball Definition)

Variables Explained

  • Debt Name: A descriptive name for the loan (e.g., Credit Card, Student Loan).
  • Balance ($): The current outstanding principal amount on the debt.
  • Rate (%): The annual percentage rate (APR) of interest for the debt.
  • Min Pay ($): The minimum required monthly payment for the debt.
  • Extra Monthly Payment: The fixed amount you are committing to pay in addition to the total minimum payments.

Related Calculators

What is the Debt Snowball Method?

The Debt Snowball method is a popular debt-reduction strategy where you pay off your debts in order of smallest balance to largest. The key psychological benefit is the quick wins achieved by eliminating the smallest debts rapidly, providing motivation (a “snowball” effect) to continue tackling larger debts.

Under this method, you make minimum payments on all debts except the smallest one. You then take any extra money you have and apply it to the smallest debt. Once that debt is paid off, you roll the entire payment amount (the old minimum payment plus the extra payment) onto the next smallest debt, and so on. This process ensures you maintain momentum by freeing up minimum payments and dedicating them to the next target.

How to Calculate Debt Snowball (Example)

Assume you have $100 in extra money each month and three debts: CC1 ($500 balance, $25 min), Car ($3000 balance, $150 min), Student Loan ($10000 balance, $100 min).

  1. Determine Total Payment: Total Minimum Payments = $25 + $150 + $100 = $275. Total Monthly Payment = $275 + $100 (Extra) = $375.
  2. Focus on CC1: You apply $25 (min) + $100 (extra) = $125 towards the $500 balance of CC1. CC1 is paid off in approximately 4 months.
  3. Roll Over to Car Loan: CC1 is paid off. The total payment freed up is $125. This $125 is added to the minimum payment of the Car Loan ($150). Your new focused payment on the Car Loan is $150 + $125 = $275.
  4. Continue the Snowball: Once the Car Loan is paid, the full $275 is added to the minimum payment of the Student Loan ($100), creating a massive focused payment of $375/month, rapidly paying off the largest debt.

Frequently Asked Questions (FAQ)

Is the Debt Snowball or Debt Avalanche method better?

The Debt Snowball method (smallest balance first) is better for motivation and behavioral finance. The Debt Avalanche method (highest interest rate first) is mathematically superior, saving the most money on interest, but requires more discipline.

Do I include my mortgage in the Debt Snowball calculation?

Generally, no. Mortgages are large, long-term debts. The Debt Snowball is most effective for consumer debts and personal loans. However, once all consumer debts are cleared, you can certainly “snowball” your payments toward the mortgage principal.

What happens if I miss an extra payment?

The calculation assumes a consistent extra payment. If you miss one, your projected payoff date will shift slightly. The strength of the method is that the minimum payments must still be met, ensuring you don’t fall further behind.

Can I use the Debt Snowball if I have variable interest rates?

Yes, but the results of this calculator will be an estimate. This calculator uses the current annual rate, assuming it remains fixed. For variable rates, you must manually re-run the calculation when the rate changes significantly.

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