Debt Payoff Calculator

This debt payoff calculator helps you create a plan to eliminate your debts using different strategies. Compare the debt snowball method (paying off smallest balances first) with the debt avalanche method (paying off highest interest rates first) to find the approach that works best for you.

Monthly Budget

Total amount you can pay toward all debts each month

Debt Strategy

Your Debts

How the Debt Payoff Calculator Works

The debt payoff calculator helps you compare different debt repayment strategies:

Debt Snowball Method

The debt snowball method focuses on paying off debts from smallest balance to largest, regardless of interest rate. This approach provides psychological wins as you eliminate debts quickly.

  1. List all your debts from smallest to largest balance
  2. Make minimum payments on all debts
  3. Put any extra money toward the smallest debt
  4. Once the smallest debt is paid off, add that payment amount to the next smallest debt
  5. Continue this process until all debts are paid off

Debt Avalanche Method

The debt avalanche method focuses on paying off debts from highest interest rate to lowest. This approach minimizes the total interest paid and is mathematically optimal.

  1. List all your debts from highest to lowest interest rate
  2. Make minimum payments on all debts
  3. Put any extra money toward the highest interest debt
  4. Once the highest interest debt is paid off, add that payment amount to the next highest interest debt
  5. Continue this process until all debts are paid off

Monthly Interest Calculation

Monthly Interest = (Current Balance × Annual Interest Rate) ÷ 12

Principal Payment

Principal Payment = Monthly Payment - Monthly Interest

The calculator iteratively applies these calculations month by month until all debts are paid off, tracking:

  • How much of each payment goes to principal vs. interest
  • The remaining balance after each payment
  • The total time required to pay off all debts
  • The total interest paid over the life of all debts

By comparing the debt snowball and debt avalanche methods, you can choose the strategy that works best for your financial situation and personal motivation.