Debt Payoff Calculator
List your business debts, add whatever you can pay above the minimums, and see how long it takes to clear them all. The calculator runs the debt avalanche and the debt snowball side by side so you can see exactly what each ordering costs in interest and time.
| Debt | Balance | Rate | Min / mo | Remove |
|---|---|---|---|---|
| $ | % | $ | ||
| $ | % | $ | ||
| $ | % | $ |
Avalanche vs snowball, side by side
Both columns use the same debts, the same minimums, and the same extra payment. The only difference is which debt receives the leftover money each month.
| Measure | Avalanche (highest rate first) | Snowball (smallest balance first) | Snowball − Avalanche |
|---|
A positive difference means the snowball ordering costs more on that measure. A zero means the two methods came out level on that measure — the months row can tie even when total interest does not, because payoff is counted in whole months. The two plans are identical only when both methods pick the same target every month, which requires your debts to rank the same way by rate as they do by balance.
Payoff order
The order each debt is cleared under the strategy selected above, with the month it reaches zero and the interest it costs along the way.
| Order | Debt | Starting balance | Rate | Paid off | Interest paid |
|---|
How the debt payoff calculator works
There is no closed-form formula for retiring several debts at once, so this tool runs an actual month-by-month simulation instead of solving an equation. Each month it repeats the same four steps:
2. Every debt receives its minimum payment.
3. Whatever is left of the budget goes to a single target debt.
4. When a debt reaches zero, its minimum rolls into the budget.
Your monthly budget is fixed: it is the sum of every minimum payment plus the extra amount you enter, and it never shrinks. When a debt disappears, its minimum does not return to your pocket in this model — it rolls onto the next debt in line. That rollover is what makes the payoff accelerate, and it is why the last debt in the queue is usually cleared far faster than its own minimum payment alone would clear it.
The only thing the two strategies change is which debt is the target in step 3. The avalanche targets the highest interest rate. The snowball targets the smallest remaining balance. The budget, the minimums, and the interest math are identical in both runs.
What the arithmetic says about avalanche and snowball
The avalanche always produces total interest less than or equal to the snowball, and that is a matter of arithmetic rather than opinion. Interest each month is balance × monthly rate, added up across your debts. Because the budget is fixed, every spare dollar removes exactly one dollar of balance no matter which debt you send it to. The only question is which dollar of balance disappears. A dollar removed from a 22.9% card stops 22.9 cents of annual interest; the same dollar removed from a 7.9% equipment loan stops 7.9 cents. Sending every spare dollar to the highest rate still outstanding is therefore the ordering that stops the most interest per dollar spent, and by construction no other ordering can beat it.
The two methods tie only if they choose the same target in every month of the plan, which requires the debts to rank the same way by rate as they do by balance. With two debts that happens whenever the highest-rate debt is also the smaller one. With more than two, agreeing on the first target is not enough: once that debt clears, the remaining debts are re-ranked by rate under one method and by balance under the other, and the paths can separate.
The snowball's case is not arithmetic. It is that clearing an entire debt off the list is a visible, finite event, and some people keep going because of it. A calculator cannot measure that. It can only price it: the gap in the comparison table above is what the snowball ordering costs in interest and months. Whether that price is worth paying is a judgement about your own follow-through, not a calculation. Both orderings are shown; neither is marked as the right answer.
Why the extra payment usually matters more than the strategy
Move the extra payment slider, then flip the strategy toggle. In most realistic debt mixes the slider moves the result considerably more than the toggle does. The ordering only redistributes a fixed budget among debts whose rates are often within a few points of one another, while the extra payment changes the size of the budget itself. Adding fifty dollars a month frequently changes total interest more than switching methods ever could.
This is also why the two columns converge as the extra payment grows. With a large budget every debt is retired quickly, there is little time for rate differences to compound, and the ordering stops mattering much. With a small budget, balances sit around for years and the ordering matters a great deal.
When the calculator says a debt will never be repaid
If the payment reaching a debt is smaller than the interest it accrues, the balance grows even while you pay it. A $10,000 balance at 24% accrues about $200 in the first month, so a $50 minimum leaves it roughly $150 larger than it started, and larger again the month after. No number of months fixes that. Rather than printing a payoff date that does not exist, the calculator watches for total balances that have stopped falling, stops the simulation, and says so in plain language. It stops and says so as well in a second case: when the balances are still falling, but so slowly that the plan would run past the 50-year ceiling the simulation is capped at.
If you see that message, the fix is arithmetic rather than strategic: the budget has to exceed the total interest accruing across all your debts before any payoff order can work at all. Raise the extra payment, or raise the minimums, until the total balance falls fast enough to clear the debts.
What this model leaves out
The simulation assumes fixed rates, fixed minimum payments, monthly compounding, and no new borrowing. Real business debt is messier. Variable-rate lines reprice. Credit card minimums are usually a percentage of the balance, so they shrink as the balance falls and stretch the payoff much longer than a flat minimum does. Some term loans carry prepayment penalties that make extra payments less valuable than they look here. A merchant advance priced with a factor rate has no interest rate to compare at all, and needs converting first. If you are weighing a single new loan to replace several old ones, a debt consolidation calculator models that structure more directly than this one does. Treat the output here as a comparison of orderings under consistent assumptions, not as a forecast.
Frequently asked questions
What is the difference between the debt avalanche and the debt snowball?
Both methods pay every debt its minimum and send all spare money to one target debt. The avalanche targets the debt with the highest interest rate. The snowball targets the debt with the smallest remaining balance. The monthly budget and the interest math are identical in both; only the choice of target changes.
Does the avalanche method always pay less interest than the snowball?
It always pays less than or equal, never more. Because the budget is fixed, every spare dollar removes exactly one dollar of balance wherever it is sent, so sending it to the highest rate stops the most interest per dollar. The two methods tie only if they pick the same target in every month of the plan, which requires the debts to rank the same way by rate as they do by balance. With two debts that happens whenever the highest-rate debt is also the smaller one; with more debts, agreeing on the first target does not guarantee agreement later.
What happens to a minimum payment after that debt is paid off?
It rolls onto the next target debt instead of leaving the budget. This model holds the total monthly budget constant from the first month to the last, which is why the final debts clear much faster than their own minimum payments alone would clear them.
Why does the calculator say a debt will never be paid off?
Because the payment applied to it is smaller than the interest it accrues, so the balance grows every month. A $10,000 balance at 24% accrues about $200 of interest in the first month, so a $50 minimum leaves the balance larger than it started. No payoff order fixes that. Raise the extra payment or the minimums until the total balance starts falling.
Does the payoff order matter more than the extra payment?
Usually not. The order only redistributes a fixed budget among debts whose rates are often within a few points of each other, while the extra payment changes the size of the budget itself. In many realistic debt mixes, adding a modest amount to the extra payment moves total interest more than switching between avalanche and snowball does.
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This calculator is for educational and informational purposes only and does not constitute financial, legal, tax, or lending advice. Estimates are based on the values you enter and standard financial formulas. Confirm all figures with a qualified professional before making decisions.