Debt Repayment Calculator
Plan debt payoff strategy
Your Debts
Your Debt-Free Plan
Debt-Free In
1y 10m
(22 months)
Payoff Milestones
Avalanche Method: Paying off debts with the highest interest rates first saves you the most money in interest charges.
Understanding Debt Repayment Strategies
Getting out of debt requires a solid plan and commitment. This calculator helps you create a personalized debt repayment strategy using two proven methods: the Debt Avalanche and the Debt Snowball. Both methods can help you become debt-free, but they work differently.
Debt Avalanche Method
The Debt Avalanche method focuses on paying off debts with the highest interest rates first. This approach saves you the most money in interest charges over time.
How It Works:
- List all your debts from highest to lowest interest rate
- Make minimum payments on all debts
- Put any extra money toward the debt with the highest interest rate
- Once that debt is paid off, move to the next highest interest rate
- Repeat until all debts are paid off
Best for: People who want to save the most money on interest and are motivated by long-term financial gains.
Debt Snowball Method
The Debt Snowball method focuses on paying off debts with the smallest balances first. This approach provides quick wins and psychological motivation to keep going.
How It Works:
- List all your debts from smallest to largest balance
- Make minimum payments on all debts
- Put any extra money toward the debt with the smallest balance
- Once that debt is paid off, move to the next smallest balance
- Repeat until all debts are paid off
Best for: People who need quick wins and psychological motivation to stay committed to their debt repayment journey.
Comparing the Two Methods
| Aspect | Avalanche | Snowball |
|---|---|---|
| Focus | Highest interest rate | Smallest balance |
| Interest Savings | ✓ Maximum savings | May pay more interest |
| Motivation | Long-term financial gains | ✓ Quick wins |
| Time to First Payoff | May take longer | ✓ Faster |
| Best For | Math-focused savers | Motivation seekers |
Tips for Successful Debt Repayment
- Create a budget: Track your income and expenses to find extra money for debt payments
- Stop adding new debt: Avoid using credit cards while paying off existing debt
- Build an emergency fund: Save 500-1,000 in your local currency to avoid going into debt for unexpected expenses
- Increase your income: Consider a side hustle or asking for a raise to accelerate debt payoff
- Negotiate lower rates: Call creditors to request lower interest rates
- Automate payments: Set up automatic payments to never miss a due date
- Celebrate milestones: Reward yourself (within budget) when you pay off each debt
- Stay motivated: Track your progress visually with charts or apps
Common Debt Repayment Mistakes to Avoid
- Only paying minimums: This keeps you in debt for years and costs thousands in interest
- Ignoring high-interest debt: Credit card debt at 18-25% APR grows rapidly
- Not having a plan: Without a strategy, it's easy to lose motivation
- Closing paid-off accounts: This can hurt your credit score
- Taking on new debt: Using credit cards while paying off debt defeats the purpose
- Not tracking progress: Seeing your progress helps maintain motivation
How to Use This Calculator
- Add your debts: Click "Add Debt" to include all your credit cards, loans, and other debts
- Enter details: For each debt, enter the current balance, interest rate (APR), and minimum payment
- Set extra payment: Decide how much extra you can pay each month beyond minimums
- Choose strategy: Select either Avalanche (save more money) or Snowball (quick wins)
- Review results: See your debt-free date, total interest paid, and payoff milestones
- Take action: Use this plan to start paying off your debts systematically
Example Scenario
Sarah's Debt Situation:
- Credit Card 1: 5,000 balance, 18% APR, 150 minimum payment
- Credit Card 2: 3,000 balance, 22% APR, 90 minimum payment
- Personal Loan: 8,000 balance, 12% APR, 200 minimum payment
- Extra payment available: 200/month
Avalanche Method Results:
- Debt-free in: 2 years 8 months (32 months)
- Total interest paid: 2,450
- First payoff: Credit Card 2 (highest rate) in 8 months
Snowball Method Results:
- Debt-free in: 2 years 9 months (33 months)
- Total interest paid: 2,680
- First payoff: Credit Card 2 (smallest balance) in 6 months
Analysis: Avalanche saves 230 in interest and pays off debt 1 month faster, but Snowball provides a quicker first win (6 vs 8 months) for motivation.
When to Consider Debt Consolidation
Debt consolidation might be a good option if you:
- Have multiple high-interest debts (above 15% APR)
- Can qualify for a lower interest rate (good credit score)
- Want to simplify payments into one monthly bill
- Have a stable income to make consistent payments
Options include balance transfer credit cards (0% intro APR), personal loans, or home equity loans. However, be cautious of fees and ensure you don't accumulate new debt after consolidating.
💡 Pro Tips for Faster Debt Payoff:
- Use windfalls (tax refunds, bonuses) to make lump-sum payments
- Round up payments to the nearest 50 or 100 in your currency
- Cut one expense and redirect that money to debt
- Make bi-weekly payments instead of monthly (13 payments per year)
- Sell unused items and apply proceeds to debt
- Use cash-back rewards to make extra payments
- Review and reduce subscriptions you don't use
- Consider a temporary side hustle to accelerate payoff
Important Disclaimer
For Educational and Informational Purposes Only: This calculator is provided solely for educational and informational purposes. It is designed to help you understand potential investment outcomes and should not be considered as financial, investment, tax, or legal advice.
Not Professional Advice: The calculations, results, and information provided by this tool do not constitute professional financial advice, investment recommendations, or tax guidance. Always consult with a qualified financial advisor, certified financial planner, tax consultant, or legal professional before making any investment or financial decisions.
Accuracy and Assumptions: While we strive to ensure the accuracy of our calculators, the results are based on the inputs you provide and certain assumptions. Actual returns, interest rates, tax implications, and other factors may vary significantly based on market conditions, government policies, individual circumstances, and other variables beyond our control.
No Guarantees: Past performance is not indicative of future results. The calculations provided are estimates and projections only. We make no guarantees, warranties, or representations regarding the accuracy, completeness, or reliability of the information or calculations provided.
Regional Variations: Financial regulations, tax laws, interest rates, and investment rules vary significantly by country, state, and jurisdiction. The information provided may not be applicable to your specific location or circumstances. Always verify current rates, rules, and regulations with official sources or local authorities.
Tax Implications: Tax laws are complex and subject to change. The tax-related information provided is general in nature and may not apply to your specific situation. Consult a qualified tax professional for advice tailored to your individual circumstances.
Market Risks: All investments carry risk, including the potential loss of principal. Market conditions, economic factors, and other variables can significantly impact investment performance. Diversification and asset allocation do not guarantee profit or protect against loss.
Currency and Exchange Rates: Currency detection and conversion are provided for convenience only. Exchange rates fluctuate constantly and may differ from the rates used in calculations. Always verify current exchange rates with your financial institution.
Updates and Changes: Interest rates, contribution limits, tax benefits, and other financial parameters are subject to change by government authorities, regulatory bodies, and financial institutions. We recommend verifying current rates and rules with official sources before making any decisions.
No Liability: We shall not be liable for any direct, indirect, incidental, consequential, or punitive damages arising from your use of this calculator or reliance on the information provided. Use this tool at your own risk.
Independent Verification: Always independently verify all calculations, rates, and information with official sources, financial institutions, or qualified professionals before making any financial commitments or investment decisions.
By using this calculator, you acknowledge that you have read, understood, and agree to this disclaimer. You accept full responsibility for any decisions made based on the information provided by this tool.