Debt Payoff Calculator

Feeling overwhelmed by debt? Our Free Debt Payoff Calculator can help you build a clear, actionable plan. Enter your debts, set your monthly payment budget, and instantly compare the Debt Snowball (pay smallest first for quick wins) and Debt Avalanche (pay highest interest first to save money) methods. Discover your debt-free date and take the first step towards financial freedom.

Create Your Debt Payoff Plan

Your Debts
Your Repayment Plan
Must be equal to or greater than the sum of your minimum payments.

How to Use This Calculator

  1. List Your Debts: For each debt, enter its name, current balance, interest rate (APR), and minimum monthly payment. Use "Add Debt" for more rows.
  2. Set Your Budget: Enter the `Total Monthly Amount` you can dedicate to debt payments (this must be at least the sum of your minimums).
  3. Choose Strategy: Select either `Debt Snowball` or `Debt Avalanche`.
  4. Calculate Plan: Click "Calculate" to see your debt-free date, total interest paid, and a month-by-month payment schedule.
  5. Compare: Try calculating again with the *other* strategy to see how it impacts your timeline and savings.

Debt Snowball vs. Debt Avalanche Explained

When you're trying to pay off multiple debts, two popular strategies are the Debt Snowball and the Debt Avalanche. Both involve making minimum payments on all but one "target" debt, to which you apply all extra available funds.

  • Debt Snowball: You order your debts from the smallest balance to the largest. You aggressively pay off the smallest debt first for a quick psychological win. Once it's paid, you roll the money you were paying on it (minimum + extra) into the next smallest debt. This method can be very motivating.
  • Debt Avalanche: You order your debts from the highest interest rate (APR) to the lowest. You aggressively pay off the debt with the highest APR first. Once it's paid, you roll that payment into the debt with the next highest APR. Mathematically, this method will save you the most money on interest over time.

Our calculator allows you to see the outcome of both strategies with your specific debts.

Creating Your Debt Payoff Plan

A successful debt payoff plan involves more than just picking a strategy. Consider these steps:

  1. List All Debts: Gather details for every debt: creditor, balance, APR, minimum payment.
  2. Create a Budget: Understand your income and expenses to see how much extra you can realistically allocate to debt repayment each month. Our tool requires this "Total Monthly Payment."
  3. Build an Emergency Fund: Aim for at least a small emergency fund ($500-$1,000) before aggressively tackling debt. This prevents new debt if unexpected costs arise.
  4. Choose Your Strategy: Use our calculator to compare Snowball vs. Avalanche.
  5. Automate Payments: Set up automatic payments for at least the minimums to avoid missed payments. Manually send extra payments to your target debt.
  6. Track Progress & Adjust: Regularly review your plan and celebrate milestones. If your income or expenses change, adjust your total monthly payment accordingly.

Beyond the Basic Strategies

While Snowball and Avalanche are effective, also consider:

  • Debt Consolidation: Combining multiple debts into a single new loan, potentially with a lower interest rate (e.g., a balance transfer credit card or a debt consolidation loan). This can simplify payments but be wary of fees and terms.
  • Balance Transfers: Moving high-interest credit card debt to a card with a 0% introductory APR. Pay close attention to transfer fees and the rate after the intro period ends.
  • Negotiating with Creditors: Sometimes creditors may be willing to offer a lower interest rate or a hardship plan if you're struggling.

Maintaining Debt Freedom

Once you become debt-free, the goal is to stay that way. This involves:

  • Sticking to a Budget: Continue to track your spending and live within your means.
  • Building a Larger Emergency Fund: Aim for 3-6 months of living expenses.
  • Saving & Investing: Redirect the money you were using for debt payments towards your savings and investment goals.
  • Avoiding New Unnecessary Debt: Be mindful of your spending habits and avoid accumulating new high-interest debt.

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Frequently Asked Questions (FAQ)

FAQ Index

The debt snowball method involves listing your debts from the smallest balance to the largest. You make minimum payments on all debts *except* the smallest one. You pay as much extra as possible on that smallest debt. Once it's gone, you add its payment amount to the minimum payment of the *next* smallest debt and attack it. This builds momentum through quick wins.

The debt avalanche method involves listing your debts from the highest interest rate (APR) to the lowest. You make minimum payments on all debts *except* the one with the highest APR. You pay as much extra as possible on that highest-interest debt. Once it's gone, you move to the next highest. This method saves the most money on interest over time.

It depends on your personality. Debt Avalanche saves more money on interest. Debt Snowball provides quicker psychological wins, which can help keep you motivated. Our calculator lets you see the numbers for both.

Pay as much as you can comfortably afford after covering essential expenses and building a small emergency fund. Use a budget to find extra money. Even small extra amounts make a big difference over time.

Most experts recommend having at least a small emergency fund ($500-$1000) before aggressively paying off debt. This prevents you from going *back* into debt if an unexpected expense arises.

Look for ways to cut expenses (eating out, subscriptions, etc.) or increase income (side hustle, selling items). Put any windfalls (tax refunds, bonuses) towards your debt.

Generally, it's better to keep long-standing credit card accounts open (even with a zero balance) after paying them off. Closing them can reduce your available credit and shorten your credit history, potentially lowering your credit score.

Debt consolidation combines multiple debts into one new loan. It can simplify payments and potentially lower your interest rate if you have good credit. However, it doesn't reduce the amount you owe, and if the term is longer, you might pay more interest overall.

Most debt payoff plans (like Snowball/Avalanche) focus on consumer debts like credit cards, personal loans, and sometimes student/auto loans. Mortgages are typically excluded because they are very long-term, secured, and often have lower interest rates.

Track your progress visually (use our charts!), celebrate small wins (like paying off one debt), share your goals with a trusted friend or family member, and regularly revisit your 'why' – the reason you want to be debt-free.