Calculator Panel
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Enter your values above and click Calculate.
What This Calculator Does
This calculator structures a multi-debt payoff schedule using the Debt Snowball methodology, showing the order of payoff and total interest paid.
How to Use This Calculator
Enter up to 3 debts with their balances, interest rates, and minimum payments, along with your extra monthly payoff budget, then click Calculate.
How the Calculation Works
The underlying math engine processes your inputs using exact formulas. This systematic approach ensures professional, institutional-grade calculation precision:
Mathematical Formula
Formula Legend:
- · Debts are ranked from lowest outstanding balance to highest.
- · Minimum payments are paid on all debts except the smallest, which receives the maximum possible payment.
Practical Example
Suppose you have three debts: Credit Card A ($500 balance, $25 min, 18% APR), Credit Card B ($2,000 balance, $60 min, 15% APR), and Personal Loan C ($5,000 balance, $150 min, 8% APR). You have an extra $200 monthly budget:
Step-by-Step Mathematical Walkthrough:
- 1 List debts by balance: CC A ($500), CC B ($2,000), Loan C ($5,000).
- 2 Pay minimums on CC B ($60) and Loan C ($150). Pay $225 + $25 = $250 on CC A.
- 3 CC A is fully paid off in 2 months. The $250 payment rolls over to CC B.
- 4 Pay $250 + $60 = $310 monthly on CC B until paid, then roll the full $310 + $150 = $460 over to Loan C.
Important Assumptions & Notes
- Minimum payments are maintained on all non-active accounts.
- As soon as a debt is paid off, its entire previous payment is rolled into the next smallest debt.
Common Mistakes or Considerations
- Assuming the Debt Snowball is the cheapest mathematical path (the Debt Avalanche is cheaper, but Snowball offers stronger behavioral reinforcement).
Frequently Asked Questions
What is the Debt Snowball method?
A debt reduction strategy where you list your debts in order of smallest balance to largest. You pay the minimum on all other debts and put all extra cash toward the smallest debt first.
Why focus on the smallest balance instead of interest rate?
This strategy relies on behavioral psychology. Eliminating a small debt quickly provides an immediate sense of achievement, boosting motivation to stick with the plan.
Is the Debt Snowball mathematically superior to the Debt Avalanche?
No. The Debt Avalanche (paying highest interest rate first) is mathematically cheaper. However, studies show that the Snowball's quick psychological wins often lead to a higher overall completion rate.
When should I roll over my payments?
Roll over payments immediately. The instant a debt is completely wiped out, add its entire monthly payment (the minimum plus any extra) to the next target debt's payment.