Avalanche — highest rate first
3y 2m
- Total interest
- $3,519
- Total paid
- $34,019
- Payoff order
- Credit card → Car loan → Student loan
Personal finance
Debt Payoff Calculator
Two orderings, same money. One clears the expensive debt first, the other clears the smallest. Here is what each actually costs you.
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Snowball — smallest balance first
3y 2m
- Total interest
- $3,519
- Total paid
- $34,019
- Payoff order
- Credit card → Car loan → Student loan
- Starting balance
- $30,500
- Interest saved by the avalanche
- $0
- Months saved by the avalanche
- 0 months
- First debt cleared (snowball)
- Credit card
Which method to actually use
The avalanche always wins on arithmetic: paying the highest rate first minimises the interest the lender collects. If the saving above is large, take it and ignore how the plan feels.
The snowball wins on behaviour. Clearing one small balance early removes a payment from your life and gives you visible proof the plan works, which is why people stick with it. When the difference in interest is small, the method you will finish beats the method that is theoretically optimal.
Both models assume a fixed monthly budget, fixed rates and no new borrowing. Add a fee to the balance, or move the rate, and re-run it — the ranking of your debts can change with a single promotional rate expiring.