Debt payoff optimiser
Run snowball and avalanche on the same debts and see which one wins on time, interest, and overall fit.
Calculator optimiseLogic updated April 2026
This calculator runs both the snowball (smallest-balance-first) and avalanche (highest-rate-first) debt payoff strategies against the same debt portfolio and surfaces a side-by-side comparison plus a recommended strategy — the one with lower total interest. It's the right tool when you have multiple debts and want a definitive answer on which payoff order to use.
How this is calculated
Formula
For each strategy: simulate every debt month-by-month ; pay minimums on all ; apply extra to the priority debt (smallest for snowball, highest-rate for avalanche) ; freed minimums roll into the extra pool ; recommended = lower-total-interest strategyStep-by-step
- Run the snowball simulation: extra payment goes to smallest-balance debt; when paid off, its minimum cascades into the pool
- Run the avalanche simulation: extra payment goes to highest-rate debt; when paid off, its minimum cascades
- Track months to debt-free and total interest paid under each strategy
- Calculate the dollar and time difference between strategies
- Recommend the strategy with lower total interest paid (almost always avalanche)
- Surface both schedules so the user can see the actual payoff order under each strategy
- Rounding mode
- ROUND_HALF_UP
- Precision
- 20-digit internal precision (Decimal.js), rounded to 2 decimal places for display
- Logic last reviewed
Assumptions & limitations
What this calculator assumes
- Each debt accrues interest monthly at its stated annual rate
- Minimum payments are fixed for the life of each debt
- Extra payment is made consistently every month
- When a debt is paid off, its minimum payment rolls into the extra pool
- Simulation cap of 600 months (50 years) to bound analysis
- Composition layer — uses the same simulation engine as the snowball and avalanche calculators
What this calculator doesn’t account for
- Doesn't model behavioural factors — avalanche is mathematically optimal but snowball's early wins help motivation
- Doesn't account for any new debt added during the payoff period
- Doesn't include promotional or balance-transfer rates expiring
- Doesn't factor in tax effects on tax-deductible debts
- Recommends purely on total interest — your real choice may weigh time-to-debt-free or psychological factors
Worked example
A borrower has three debts: $1,500 store card at 24%, $5,000 credit card at 19%, $12,000 personal loan at 10%. Total $18,500. Extra payment: $400/month.
| Input | Value |
|---|---|
| Store card | $1,500 @ 24% / $50/month minimum |
| Credit card | $5,000 @ 19% / $150/month minimum |
| Personal loan | $12,000 @ 10% / $260/month minimum |
| Extra payment | $400/month |
Snowball: 35 months, ~$3,800 interest. Avalanche: 35 months, ~$3,500 interest. Recommended: avalanche (saves ~$300).
Both strategies clear the store card first (smallest AND highest rate — they agree). They diverge on what to attack next. Snowball goes credit card → personal loan; avalanche goes credit card → personal loan (same order — credit card has both higher rate and smaller balance than personal loan). When orders agree, the strategies produce nearly identical results. Avalanche's small edge ($300) reflects subtle differences in cascade timing. Strategies diverge meaningfully when the smallest debt is also the lowest-rate.
Frequently asked questions
How does the optimiser choose the best strategy?
By running both snowball and avalanche simulations on your exact debt portfolio and recommending whichever produces lower total interest paid. The recommendation is purely financial — it doesn't account for the psychological lift of clearing small debts first, which can matter for people who struggle to maintain payoff discipline. The dollar difference is usually small (a few hundred dollars) so either strategy is mathematically defensible.
Snowball vs avalanche — which does it recommend?
Avalanche almost always — it minimises total interest by attacking the highest-rate debt first. The exceptions are: (1) when smallest balance happens to coincide with highest rate, the strategies converge; (2) when debt rates are very close, the strategies produce near-identical results. Snowball is rarely cheaper but it's often easier to stick with — the early wins from clearing small balances reinforce the habit.
How much extra payment makes a difference?
Even small extras compound dramatically. An extra $100/month on a typical $20,000 multi-debt portfolio at 15% blended rate often saves 12+ months and $3,000+ of interest. Doubling the extra to $200/month roughly doubles the time saving and adds 50% to the interest saving. Use the calculator to test what extra payment your budget can sustain — and remember that the strategy you actually stick with beats the optimal-on-paper one you abandon.
What if I can only afford minimum payments?
Set extra payment to zero and the calculator shows the baseline scenario for both strategies. If the simulation hits the 600-month cap, your minimums aren't covering interest on at least one debt — that's an unsustainable position. The fix is increasing income, reducing other expenses to free up extra payment capacity, or considering debt consolidation to lower the blended rate.
Can I switch strategies mid-payoff?
Yes, and many people do. A common pattern: start with snowball to clear two or three small debts for psychological momentum (3–6 months in), then switch to avalanche for the bulk of the payoff. Re-run this calculator at the switch point with your remaining debts to confirm avalanche's recommendation still holds. The 'right' strategy is the one you'll execute consistently — both produce similar end results, the differentiator is execution.
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