Debt repayment calculator: avalanche vs snowball payoff plan

How do you use this debt repayment calculator?

Enter each debt once, choose how much extra you can pay each month, and the calculator compares three plans on the same numbers: avalanche, snowball and minimum payments only.

1. Choose how many debts you have, from one to six. A new set of fields appears for each one.
2. For each debt, enter the balance, the annual interest rate and the minimum payment from the latest statement or loan agreement. For a credit card, use the purchase rate and this month’s minimum. For a car loan or personal loan, the scheduled payment is the minimum.
3. Enter the extra amount you can add every month on top of all the minimums. Even a small amount changes the result, because it is the only money that speeds up the plan.
4. Pick the strategy to show in detail. Both avalanche and snowball are always compared; the one you pick drives the payoff order table and the month-by-month schedule.
5. Open “Strategy options” to switch off rollover and see what happens if each paid-off minimum is spent elsewhere instead of going to the next debt.
6. Read the result, then download the CSV for the payment and balance on every individual debt, month by month.

Inputs stay in the browser. Nothing entered is sent to a server or placed in the page address.

What is the difference between the avalanche and snowball methods?

The avalanche and snowball methods differ in only one thing: which debt receives the money left over after every minimum is paid. With rollover on, the total paid each month is the same under both.

• Avalanche targets the debt with the highest interest rate. Each extra dollar removes the most expensive interest first, so, as long as the monthly total stays the same, total interest is the lowest of any payoff order.
• Snowball targets the debt with the smallest balance. The first debt disappears sooner, which frees its minimum payment earlier and gives a visible win.
• Minimum payments only gives each debt its own minimum and nothing else. Nothing is redirected when a debt is paid off.

The table below shows how each strategy treats the same situations. It is the part most calculators leave out: when the two methods actually diverge.

For a deeper look at the trade-off between the maths and motivation, see the guide to choosing between the debt avalanche and snowball methods.

Worked example: three debts, two strategies

Take three hypothetical debts, all numbers for illustration only:

• a credit card with $6,500 owing at 20.99%, minimum $195
• a car loan with $2,400 left at 7.9%, payment $210
• a store card with $3,800 owing at 29.99%, minimum $115

On top of the minimums, $250 extra goes to debt every month. That makes a total monthly payment of $770 on $12,700 of debt. In the first month, $224.46 of that payment is interest, so only $545.54 reduces the balances.

Both strategies finish in the same month here, but the avalanche saves $195 of interest compared with the snowball, and $5,334 compared with paying minimums only. Paying minimums only takes almost six years instead of under two.

The difference is in the order. Under the snowball, the car loan is gone in month 6, the store card in month 13 and the credit card in month 20. Under the avalanche, the store card, the most expensive debt, clears in month 13; the car loan still clears in month 12 from its own payment, and the credit card follows in month 20.

What is each extra monthly dollar worth?

The first extra dollars do the most work. Using the same three debts and the avalanche method, here is what different extra amounts change. This table is also in the calculator results, rebuilt for your own debts.

Going from no extra to the first $50 a month saves $651 of interest. Going from $500 to $1,000 extra saves $633: about the same saving for ten times the added money. The rate of return on extra payments is the interest rate avoided, so the effect is largest while the expensive balances are still high.

Why does rolling over paid-off minimums matter so much?

Rollover is the step that turns a list of debts into a plan. When a debt is paid off, its minimum is added to the payment on the next target instead of going back into the budget. The total monthly payment stays level, and each debt is attacked with a bigger payment than the last.

In the worked example, switching rollover off stretches the avalanche from 20 months to 26 months and raises total interest to $2,755. The snowball, which frees the car loan’s payment early, suffers more: 30 months and $3,436 of interest. Without rollover, the snowball’s main advantage, an early freed-up payment, is simply lost. Rollover off also breaks the avalanche’s guarantee: each paid-off minimum leaves the budget, so if the highest-rate debt has a large minimum, clearing it first shrinks the monthly total sooner, and the snowball can end up costing less interest.

How does the maths work?

Every month, the calculator does four things for every debt still owing:

1. Adds interest. Each balance grows by its annual rate divided by 12. Canadian credit cards and lines of credit charge interest daily at the annual rate divided by 365 on the balance and bill it monthly; over an average month of 365 ÷ 12 days, that is exactly the annual rate divided by 12. Car loans and personal loans with monthly payments use the same monthly rate.
2. Pays every minimum. Each debt receives its minimum, or the remaining balance if that is smaller.
3. Sends the rest to the target. Whatever is left of the monthly budget (the extra, plus any minimums freed by paid-off debts when rollover is on) goes to the first debt in the payoff order. If that debt is cleared mid-month, the remainder moves on to the next one in the same month.
4. Records the month. Interest, principal, total paid and every balance are stored for the schedule and the CSV.

With a single debt and a fixed payment, the number of months has a closed form: months = −ln(1 − r × B ÷ P) ÷ ln(1 + r), where B is the balance, r the monthly rate and P the payment. The calculator’s test suite checks the simulation against this formula. With several debts and rollover, the payment on each debt changes over time, so month-by-month simulation is the only exact method. The methodology page explains how YieldMaple builds and tests its calculators.

What happens when a minimum payment does not cover the interest?

If a minimum payment is smaller than the interest charged in a month, the balance cannot fall on that minimum alone. Take a hypothetical $10,000 balance at 24% with a $150 minimum: the first month’s interest is $200, more than the payment. The calculator flags this debt and reports that the plan does not finish within 50 years.

Raising that payment to $250 a month clears the same balance in 82 months, but at a cost of $10,319 in interest, more than the original balance. Numbers like these are a signal to look at a lower rate, a larger payment or outside help, not a longer timeline.

Credit card minimums in Canada are normally set as a small share of the balance plus interest, or a floor amount, so they shrink as the balance shrinks. The guide on how credit card minimum payments are calculated walks through the formula, and the credit card payment calculator models a single card with a shrinking minimum.

Which Canadian debts usually charge which kind of interest?

Rates vary by lender and by borrower, so always use the rate on your own statement. How the interest behaves, though, follows a few common patterns:

A line of credit with an interest-only minimum is the classic trap in a debt plan: the minimum keeps the account in good standing but never repays the principal. In the calculator, a line of credit only shrinks from extra money or rolled-over payments.

Is consolidating debt better than avalanche or snowball?

Consolidation replaces several debts with one loan or one balance-transfer card. It helps only when the new rate, after fees, is clearly lower than the rates on the debts being replaced, and when the paid-off cards are not used again. The Financial Consumer Agency of Canada’s guidance on debt consolidation covers the pros and cons in plain language.

To test a consolidation offer with this calculator, run it twice. First, enter the current debts and note the avalanche result. Then set the number of debts to one, enter the total balance at the consolidation rate with its required payment plus the same extra amount, and compare the total interest and debt-free month. If the consolidated plan is not clearly better, the avalanche on the existing debts may already be the cheaper route. For offers to compare, see debt consolidation loans in Canada and balance transfer credit cards in Canada.

Common mistakes with a debt payoff plan

• Using the minimum-only timeline as the plan. Minimums are set to keep an account current, not to clear it quickly.
• Entering the promotional rate instead of the regular rate. A low introductory rate that ends partway through the plan understates the interest; enter the rate that will apply for most of the plan.
• Forgetting the rollover. Spending a paid-off debt’s payment elsewhere adds months to every remaining debt.
• Adding new charges while paying down old ones. Any new balance pushes the debt-free month out and is not modelled here.
• Running down all savings to pay debt. Without a cushion, the next unexpected bill often lands back on a credit card. The emergency fund calculator helps size a starting buffer alongside a payoff plan.
• Ignoring prepayment terms. A fixed-term loan agreement sets out when and how extra payments are accepted; check it before directing extra money to that loan.

When should you talk to a professional about debt?

A calculator shows what a set of payments can achieve; it cannot create room in a budget that is not there. If the payment needed to become debt-free in a reasonable time is more than the budget can carry, or if minimums are already being missed, outside help is worth considering.

• Non-profit credit counselling can review a budget and, where it fits, set up a debt management plan with creditors.
• A Licensed Insolvency Trustee, regulated by the Office of the Superintendent of Bankruptcy, can explain a consumer proposal or bankruptcy under federal insolvency law, and what each means for credit and assets.
• Your lender may be able to discuss hardship options, a lower rate or a revised payment schedule.

This page is educational and is not financial advice. Before making a decision about consolidation, insolvency or a large prepayment, consider checking with a qualified, licensed professional. To see where your credit stands before and after a plan, see how to check your credit score in Canada for free.