How much interest do minimum payments waste?

A ,000 balance at 18% APR can take 15+ years and ,000+ in interest with minimums. Adding even 00/month can cut years and thousands in interest.

How much interest do minimum payments waste?

A $5,000 balance at 18% APR can take 15+ years and $4,000+ in interest with minimums. Adding even $100/month can cut years and thousands in interest.

Should I build an emergency fund before paying extra on debt?

Keep at least ,000 starter emergency fund first to avoid new debt from surprise expenses. Then focus surplus toward high‑interest balances.

Should I build an emergency fund before paying extra on debt?

Keep at least $1,000 starter emergency fund first to avoid new debt from surprise expenses. Then focus surplus toward high‑interest balances.

When does consolidation or a balance transfer make sense?

If your weighted APR is high and you qualify for a lower net rate (after fees), consolidation can help. For 0% transfers, ensure you can repay within promo and the one‑time fee (3–5%) is less than interest saved.

When does consolidation or a balance transfer make sense?

If your weighted APR is high and you qualify for a lower net rate (after fees), consolidation can help. For 0% transfers, ensure you can repay within promo and the one‑time fee (3–5%) is less than interest saved.

Debt Payoff Calculator

Compare snowball vs avalanche strategies to pay off debt faster

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Methodology & Sources

Snowball vs. Avalanche Methods

Minimum Payment Impact

Average Credit Card Debt

Interest Rate Ranges

Our debt payoff calculations use standard amortization formulas to project interest paid and payoff timelines for different debt repayment strategies.

Research shows both methods are effective. The avalanche method saves more money, while the snowball method provides psychological wins that help people stay motivated.

Source: Consumer Financial Protection Bureau - Paying Off Debt

Making only minimum payments on a $5,000 credit card balance at 18% APR can take 15+ years and cost over $4,000 in interest.

Source: Bankrate - Credit Card Minimum Payment Calculator

The average American household with credit card debt carries approximately $7,000-$8,000 in balances (2023).

Source: Federal Reserve - Consumer Credit Data

Average credit card APRs range from 15-25%, with personal loans at 6-36% depending on creditworthiness.

Source: Federal Reserve - Credit Card Interest Rates

Disclaimer: This calculator provides estimates based on the information you enter. Actual results may vary due to changes in interest rates, fees, payment schedules, and other factors. Always verify with your creditor for exact payoff calculations.

Snowball vs Avalanche: Which Debt Payoff Method is Better?

⭐ Debt Snowball Method

💰 Debt Avalanche Method

⚠️ The Minimum Payment Trap

Pay off your smallest debts first, regardless of interest rate. Once the smallest debt is paid off, roll that payment into the next smallest debt.

✓ Pros: Quick wins, psychological motivation, momentum building

✗ Cons: May pay more in total interest

Best for: People who need motivation and quick wins to stay on track

Pay off your highest interest rate debts first, regardless of balance. This minimizes the total interest you'll pay over time.

✓ Pros: Saves the most money, mathematically optimal, faster payoff

✗ Cons: Slower initial wins, requires discipline

Best for: Disciplined savers who want to minimize interest paid

Paying only the minimum on your debts keeps you in debt for years and costs thousands in extra interest. Here's a real example:

Example: $5,000 credit card at 18% APR

• Minimum payments only: 15+ years, $4,000+ in interest
• Extra $100/month: 4 years, $1,200 in interest
• Savings: $2,800 and 11 years!

Even small extra payments make a massive difference. The calculator above shows exactly how much you'll save.

How to Get Out of Debt Faster

Choose your method: Pick snowball for motivation or avalanche to save the most money. Both work—the best method is the one you'll stick with.
Find extra money: Use our budget planner to identify expenses you can cut, sell unused items, pick up a side hustle, or redirect windfalls (tax refunds, bonuses) to debt.
Automate your payments: Set up automatic payments to ensure you never miss a due date. Late payments hurt your credit score and add fees.
Avoid new debt: Stop using credit cards while paying off debt. Put them in a drawer or freeze them in a block of ice.
Build emergency savings: While paying off debt, save at least $1,000 for emergencies to avoid taking on new debt. Use our emergency fund calculator to determine your full target once debt-free.
Celebrate milestones: When you pay off each debt, celebrate (within budget!) to stay motivated. Track your progress and remember why you started.
Consider debt consolidation: If you have high-interest credit card debt, explore balance transfer options or consolidation loans that might lower your rate.

Debt Payoff Strategies Comparison

💰 Debt Avalanche vs Snowball Complete Guide

Learn which debt payoff method will save you the most money and keep you motivated:

Compare the mathematically optimal Avalanche method versus the motivation-focused Snowball method. Includes real examples, cost comparisons, and decision framework to choose the best strategy for your situation.

Key Financial Terms

Understand the essential concepts behind this calculator

APR vs Interest Rate

APR reflects total borrowing costs; interest rate only shows the cost of borrowing money.

Learn more →

Accounts Payable

Accounts payable are short-term liabilities that a business owes to suppliers for goods or services received.

Learn more →

Accounts Receivable

Accounts receivable is money owed to a business, crucial for cash flow management.

Learn more →

Audit

An audit is a systematic review of financial records to ensure accuracy and compliance, helping to avoid costly mistakes.

Learn more →

View all financial terms in our glossary →

Frequently Asked Questions

Common questions about the Debt Payoff Calculator

Avalanche (highest APR first) saves the most interest; Snowball (smallest balance first) creates faster wins that improve follow‑through. Choose the method you’ll stick with.

Learn More

Federal Student Loan Interest Rates (2024-2025)

• Undergraduate Direct Loans: 6.53%
• Graduate Direct Unsubsidized: 8.08%
• Direct PLUS Loans: 9.08%

→Source: Federal Student Aid - Interest Rates(2024-2025)

Income-Driven Repayment Plans

• SAVE Plan: 5% of discretionary income (undergraduate), 10% (graduate), 0% below 225% FPL
• PAYE Plan: 10% of discretionary income, capped at 10-year standard
• IBR Plan: 10-15% of discretionary income based on loan date
• ICR Plan: Lesser of 20% discretionary income or fixed 12-year payment

→Source: Federal Student Aid - Income-Driven Repayment Plans(2025)

Public Service Loan Forgiveness (PSLF)

• Requires 120 qualifying monthly payments (10 years)
• Must work full-time for qualifying employer (government/non-profit)
• Remaining balance forgiven tax-free after 120 payments

→Source: Federal Student Aid - PSLF Program(2025)

Average Student Loan Debt (Class of 2023)

• Bachelor's degree borrowers: $28,950 average debt
• Total outstanding student loan debt (U.S.): $1.75 trillion
• Average monthly payment: $200-$299 for most borrowers

→Source: Education Data Initiative - Student Loan Debt Statistics(2023)

Refinancing Rates (2025)

• Private refinancing rates: 4.5% - 9.5% (varies by credit, term)
• Note: Refinancing federal loans means losing federal protections (IDR, PSLF, forbearance)

→Source: CFPB - Student Loan Refinancing(2025)

Important

Student loan rules change frequently. Always verify current program requirements at StudentAid.gov before making decisions.

⚠️ Important