Debt Payoff Calculator

Understanding Debt Payoff Strategies

There are two popular methods for paying off debt: the Debt Snowball and Debt Avalanche methods. This calculator helps you compare both approaches and create a personalized debt payoff plan.

Debt #1

Understanding Debt Payoff Methods

Debt Snowball Method

How It Works

Pay off debts from smallest to largest balance, regardless of interest rate. This method provides quick wins and psychological motivation.

  • List all debts from smallest to largest balance
  • Pay minimum payments on all debts
  • Put extra money toward the smallest debt
  • Repeat until all debts are paid

Debt Avalanche Method

How It Works

Pay off debts from highest to lowest interest rate. This method minimizes total interest paid.

  • List all debts from highest to lowest interest rate
  • Pay minimum payments on all debts
  • Put extra money toward the highest interest debt
  • Repeat until all debts are paid

Expert Tips for Debt Payoff

Choose Your Strategy

The best method depends on your personality and financial situation. Snowball is better for motivation, while Avalanche saves more money.

Increase Your Payments

Look for ways to increase your monthly payment amount through budgeting or additional income.

Consider Debt Consolidation

If you have high-interest debt, consider consolidating to a lower interest rate loan.

Disclaimer

This calculator provides estimates only. Actual debt payoff times and interest costs may vary based on your specific situation. Please consult with a financial advisor for personalized debt management advice.