Debt Snowball Calculator
Compare snowball and avalanche methods to create your personalized debt payoff plan.
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Debt Snowball vs Avalanche Methods
Both methods work to eliminate debt, but they approach it differently. Choose the one that fits your personality and financial situation.
Debt Snowball Method
How it works: Pay minimum on all debts except the smallest. Put all extra money toward the smallest debt. When paid off, roll that payment to the next smallest debt.
Advantages: Quick wins boost motivation, Simple to understand, Psychological momentum
Best for: People who need motivational boosts, Those with multiple small debts, Anyone who's failed at debt payoff before
Debt Avalanche Method
How it works: Pay minimum on all debts except highest interest rate. Put all extra money toward highest rate debt. When paid off, roll payment to next highest rate.
Advantages: Saves most money on interest, Mathematically optimal, Fastest debt elimination
Best for: Disciplined people, Those with large high-interest debts, People motivated by math not emotions
Real Example Comparison
$30,000 total debt across 3 debts, $650 total monthly payment:
Snowball: Debt-free in 52 months, $3,200 total interest
Avalanche: Debt-free in 50 months, $2,800 total interest
Difference: Avalanche saves $400 but takes same time. Snowball gives first payoff in 8 months vs 14 months.
Keys to Success (Either Method)
- Track your progress monthly
- Celebrate small wins
- Don't take on new debt
- Find extra money to accelerate payoff
- Stay consistent - don't give up
Disclaimer
This calculator provides estimates based on consistent payments and no new debt. Actual results depend on following the plan, interest rate changes, and avoiding new debt. Consult financial advisors for personalized advice.
Frequently Asked Questions
What is the debt snowball method?
The debt snowball method pays off debts from smallest to largest balance, regardless of interest rate. Quick wins keep you motivated. When one debt is paid, roll that payment to the next smallest debt.
Snowball vs avalanche method?
Snowball: Pay smallest balance first for psychological wins. Avalanche: Pay highest interest rate first to save most money. Snowball keeps people motivated; avalanche is mathematically optimal.
Which debt payoff method is better?
Avalanche saves more money in interest. Snowball provides motivation through quick wins. Choose avalanche if disciplined; choose snowball if you need motivational boosts. Both work if you stick with it.
How fast can I become debt free?
It depends on total debt, interest rates, and payment amount. Average Canadians take 2-5 years with focused effort. The more you can pay monthly, the faster you'll be debt-free.
Should I save or pay off debt?
Keep a small emergency fund ($1,000-2,000) first, then focus on high-interest debt (>6%). Once debt is under control, build 3-6 months expenses and invest for the future.