How the debt snowball calculator works
The debt snowball is a payoff strategy popularized by personal-finance author Dave Ramsey. You list debts from smallest to largest balance, pay the minimums on all of them, and direct every extra dollar to the smallest one. When it is paid off, you add its entire payment to the next debt, so the payments grow like a snowball rolling downhill.
The month-by-month logic
Pay each minimum → send all remaining budget to the target debt
Budget = Σ minimums + extra payment (constant until debt-free)
The snowball target is the smallest remaining balance. The avalanche target is the highest interest rate. The calculator also runs a baseline where you only make minimum payments, so you can see exactly how much time and interest your extra payment saves.
Step-by-step example
Scenario: four debts totaling $29,900 with $600 in combined minimums, plus $200 extra per month (the default values above).
- Total monthly budget: $600 + $200 = $800.
- The $1,200 medical bill is smallest, so it receives the extra $200 and is cleared in about month 5.
- Its $50 minimum rolls into the $4,200 credit card, which is cleared around month 18.
- The car loan follows around month 28, then the student loan around month 43.
- Result: debt-free in roughly 43 months with about $4,100 in interest, versus about 106 months and $8,100 in interest on minimums alone.
Tips to finish faster
- Put windfalls such as tax refunds and bonuses toward the target debt.
- Pause new borrowing while you are paying down balances.
- Consider refinancing or a balance transfer if your credit qualifies you for a significantly lower rate.
Frequently asked questions
You pay the minimum on every debt, then throw every spare dollar at the smallest balance. When it is gone, its payment "rolls" into the next-smallest debt, building momentum like a snowball. The quick wins help many people stay motivated.
The avalanche method targets the highest interest rate first and usually saves the most money. The snowball targets the smallest balance first and usually feels faster. Toggle between them above to see the exact difference for your debts.
Yes. The plan assumes your total monthly payment (all minimums plus your extra amount) stays constant. As each debt is paid off, its freed-up payment is added to the next target.
If a debt’s minimum payment is lower than its monthly interest and you add no extra money, the balance never shrinks. Increase the extra monthly payment or raise that debt’s payment.
You can add any installment or revolving debt, but most people leave the mortgage out and focus on credit cards, auto loans, student loans and personal loans. You can add up to 10 debts.
Disclaimer: this calculator provides estimates for educational purposes only and is not financial, tax or legal advice. Consult a qualified professional before making financial decisions.