How the snowball vs avalanche calculator works
Each month, the model adds one-twelfth of the entered APR, pays every minimum, and directs the extra payment to one target. Snowball targets the smallest current balance; avalanche targets the highest APR. When a debt closes, its former minimum is effectively available to the remaining plan.
monthly interest = current balance × (APR ÷ 12)snowball priority = smallest balance firstavalanche priority = highest APR firstUnderstanding your results
The avalanche is mathematically designed to minimize interest under consistent assumptions. The snowball may clear an account sooner and create motivational momentum. This model does not include daily compounding, changing minimums, penalty APRs, promotional expirations, fees, new purchases, settlement, or missed payments.
Frequently asked questions about debt payoff strategies
Which strategy saves more interest?
The debt avalanche generally saves more interest because it attacks the highest borrowing cost first while maintaining minimums elsewhere. If two debts have the same APR, payoff timing may be similar; the exact advantage depends on balances, rates, minimum payments, and the extra amount.
Why would anyone choose the debt snowball?
The snowball can close a small balance earlier, reducing the number of active accounts and giving some people a motivating visible win. That behavioral benefit may matter if it helps someone sustain a plan that they would otherwise abandon.
Should I stop saving while paying debt?
That depends on income stability, emergency reserves, employer retirement matches, interest rates, and risk. A payoff calculator cannot decide an appropriate safety cushion. Consider a nonprofit credit counselor or qualified fiduciary adviser for individualized guidance.