Debt avalanche calculator
Add each of your debts — balance, interest rate, and minimum payment — plus an extra amount you can put toward debt each month, and see your debt-free date, the total interest you will pay, and the exact payoff order. It is for anyone carrying credit cards, store cards, or personal loans who wants the mathematically cheapest way out of debt.
How it works
The tool runs a month-by-month simulation of your debt payoff. In each simulated month:
- Interest accrues on every open balance: monthly interest = balance × (annual rate ÷ 100) ÷ 12
- Minimums are paid on every debt to keep accounts current
- The full remaining budget — any freed-up minimums from cleared debts plus your extra payment — is thrown entirely at the single priority debt
Under the avalanche strategy, the priority debt is always the one with the highest interest rate. Under snowball, the priority is the smallest balance. When a debt reaches zero, its minimum is freed up and rolled into the next priority, so each successive payoff accelerates.
Why avalanche beats snowball mathematically
The avalanche method minimises the total interest you pay because you are eliminating the most expensive debt first. High-rate balances accrue interest fastest; every pound you direct toward the 29.9% card rather than the 6.5% car loan saves the difference in interest every month. In most real-world debt portfolios, avalanche finishes several months earlier and saves a meaningful amount of interest compared with snowball, even though the psychological wins come more slowly.
Snowball’s advantage is motivation: clearing a small balance quickly delivers a sense of progress that keeps some people on track. If the interest rates on your debts are close together, the financial difference between the two strategies is small and choosing the more motivating one is reasonable.
Worked example
Three debts paid with £150 extra per month, avalanche order:
| Debt | Balance | Rate | Minimum/mo |
|---|---|---|---|
| Store card | £1,200 | 29.9% | £40 |
| Credit card | £4,000 | 22.9% | £100 |
| Car loan | £8,000 | 6.5% | £180 |
The avalanche plan attacks the store card at 29.9% first. Once it is cleared — typically within a few months — the freed-up £40 minimum plus the £150 extra rolls to the credit card at 22.9%. Finally the full accumulated surplus hits the car loan at 6.5%. By targeting the highest-rate balance each time, this order minimises the total interest accrued across all three debts while the simulation runs.
Tips for getting the most out of the result
- Be honest about minimums. Many lenders recalculate minimums monthly as a percentage of the balance, but entering a fixed minimum gives a useful conservative estimate.
- Increase the extra when you can. Even an extra £20 or £30 per month shaves months off the timeline because those funds go entirely to interest-heavy principal.
- Windfalls belong in the extra. A tax refund or bonus that you direct to the priority debt can collapse an entire payoff phase early.
All calculations run in your browser — your figures are never uploaded.