Debt Payoff Calculator 2026

Choosing between the debt snowball and debt avalanche methods depends on your personality, financial situation, and goals. | Factor | Debt Snowball | Debt Avalanche | |--------|--------------|----------------| | **Priority** | Smallest balance first | Highest interest rate first | | **Motivation** | Quick wins, psychological boost | Mathematical optimization | | **Interest Savings** | Lower savings (pays more interest) | Maximum savings (pays less interest) | | **Payoff Time** | Slightly longer | Slightly faster | | **Best For** | People who need motivation | People focused on saving money | | **Complexity** | Simple to understand | Requires more discipline | | **Success Rate** | Higher adherence due to wins | Requires patience for first payoff | ### When to Choose Snowball - You have several small debts under $1,000 - You've struggled to stick with debt plans before - You need quick wins to stay motivated - The interest rate difference between debts is small (< 3%) ### When to Choose Avalanche - You have high-interest credit card debt (15%+) - You're highly disciplined and goal-oriented - You want to minimize total interest paid - You can stay motivated without quick wins

Let's compare both methods with a realistic debt scenario. ### Starting Debt Profile | Debt Type | Balance | Interest Rate | Minimum Payment | |-----------|---------|---------------|-----------------| | Credit Card A | $2,000 | 19.9% | $60 | | Credit Card B | $5,000 | 16.5% | $125 | | Personal Loan | $8,000 | 12.0% | $200 | | Auto Loan | $12,000 | 6.5% | $280 | | **TOTAL** | **$27,000** | — | **$665** | **Extra Payment Available:** $200/month **Total Monthly Payment:** $865 ### Snowball Method Results **Payoff Order:** Credit Card A → Credit Card B → Personal Loan → Auto Loan - **Time to Debt Freedom:** 38 months (3 years, 2 months) - **Total Interest Paid:** $4,287 - **First Debt Paid Off:** 4 months (quick win!) ### Avalanche Method Results **Payoff Order:** Credit Card A → Credit Card B → Personal Loan → Auto Loan - **Time to Debt Freedom:** 36 months (3 years exactly) - **Total Interest Paid:** $3,942 - **First Debt Paid Off:** 4 months ### The Verdict The avalanche method saves **$345** and gets you debt-free **2 months faster**. However, both methods provide a quick win (paying off Credit Card A in 4 months), making either a solid choice for this debt profile. *Note: Results vary based on debt structure. Use our calculator with your actual debts for personalized results.*

Once you've chosen a method, these strategies can help you become debt-free even faster. ### Increase Your Extra Payment Every additional dollar toward debt speeds up your freedom date significantly: | Extra Monthly Payment | Payoff Time (Sample) | Total Interest | |-----------------------|---------------------|----------------| | $0 (minimums only) | 94 months (7.8 years) | $9,850 | | $100 | 52 months (4.3 years) | $5,200 | | $200 | 38 months (3.2 years) | $3,940 | | $500 | 24 months (2 years) | $2,380 | ### Additional Strategies 1. **Balance Transfer:** Move high-interest credit card debt to a 0% APR transfer card (watch for fees and promotional period) 2. **Debt Consolidation Loan:** Combine multiple debts into one lower-rate loan (only if you get a better rate) 3. **Increase Income:** Side hustles, overtime, or selling unused items to boost your extra payment 4. **Reduce Expenses:** Cut discretionary spending temporarily and redirect savings to debt 5. **Windfalls:** Apply tax refunds, bonuses, and gifts directly to debt 6. **Negotiate Rates:** Call creditors and request lower interest rates (works surprisingly often) ### The Debt Snowflake Method Combine with your chosen method: whenever you save money (pack lunch, skip coffee, use coupon), immediately make a micro-payment toward your target debt. These "snowflakes" add up to serious payoff acceleration. ### Warning Signs to Avoid - ❌ Closing paid-off credit cards (can hurt credit score) - ❌ Accumulating new debt while paying off old debt - ❌ Missing payments to make extra payments (always pay minimums first) - ❌ Using debt payoff as excuse to stop saving entirely (keep small emergency fund) Once you've eliminated high-interest debt, redirect those payments to investments. Our [compound interest calculator](https://vercalc.com/finance/compound-interest-calculator) shows how the money you were paying toward debt can grow when invested, helping you build wealth instead of just avoiding it.