Reviewed by David Chen, CFA | Expert Financial Analyst
Accelerate your journey to financial freedom with our Snowball Calculator. This tool helps you visualize how paying off debts from smallest to largest balance can create psychological momentum and eliminate interest costs faster.
Snowball Calculator
Snowball Calculator Formula
The payoff time is calculated using the loan amortization formula solved for $n$:
$$n = \frac{\log(\frac{M}{M – Pr})}{\log(1 + r)}$$
Where $P$ is principal, $r$ is monthly interest rate, and $M$ is total monthly payment (Minimum + Extra).
Formula Source: Investopedia – Amortization
Variables:
- Total Debt Balance: The current remaining amount you owe to the lender.
- Annual Interest Rate: The APR charged by your creditor.
- Minimum Monthly Payment: The lowest amount required to keep the account in good standing.
- Extra Snowball Payment: The additional cash you can commit monthly to accelerate debt elimination.
Related Calculators
What is Snowball Calculator?
The Snowball Calculator is a strategic tool based on the Debt Snowball Method. Popularized by financial experts, this method focuses on paying off debts in order of balance size—from smallest to largest—regardless of interest rate.
By using this calculator, you can determine exactly how long it will take to become debt-free by rolling the payments of a paid-off debt into the next one. This “snowball effect” provides the psychological “wins” needed to stay motivated throughout the process.
How to Calculate Snowball Calculator (Example)
- List all your debts from smallest balance to largest.
- Input the balance and interest rate of your smallest debt into the calculator.
- Add your total available monthly budget for this debt (Minimum + Extra).
- Review the “Payoff Month” result to see when this specific debt disappears.
- Once paid, add that total payment amount to the next smallest debt’s minimum payment.
Frequently Asked Questions (FAQ)
Is the Snowball Method better than the Avalanche Method? The Snowball method prioritizes psychological momentum (paying off small debts fast), while the Avalanche method prioritizes math (paying off high interest first). Both work if followed consistently.
What if my minimum payment doesn’t cover the interest? The calculator will flag this as “Negative Amortization.” You must pay at least more than the monthly interest accrued for the snowball to work.
Should I include my mortgage in the snowball? Most people focus on “consumer debt” (credit cards, car loans) first, leaving the mortgage for a later stage of financial planning.
How accurate is this calculator? It provides a mathematical projection based on fixed interest rates. Variable rates or late fees may alter actual results.