Which is better - snowball or avalanche?

Avalanche saves more money mathematically. But snowball's quick wins help many people stay motivated. Choose based on what will keep you committed.

Should I save or pay off debt first?

Build a small emergency fund first ($1,000-2,000), then focus on high-interest debt. Without an emergency fund, unexpected costs push you further into debt.

How do I find extra money for debt payments?

Review your budget for subscriptions, dining out and other discretionary spending. Even redirecting $20/week adds over $1,000/year to debt payments.

Debt Payoff Calculator

See how long it takes to become debt-free with snowball or avalanche and how much interest you pay.

Add your debts (balance, APR, minimum payment). Pay minimums on all, then put extra toward one debt: snowball targets the smallest balance first (quick wins); avalanche targets the highest interest first (saves the most interest). This is for estimation only.

Your Debts

Add each debt with balance, APR and minimum payment. Choose snowball (smallest balance first) or avalanche (highest interest first).

Debt 1

Name

Balance ($)

APR (%)

Minimum payment ($/month)

Debt 2

Name

Balance ($)

APR (%)

Minimum payment ($/month)

Extra payment per month ($)

Extra amount to put toward one debt each month (on top of minimums). Applied to the chosen debt under your strategy.

Strategy

Refinance option (compare)

Refinance highest-APR debt to compare. Leave blank to skip.

New rate (%)

Fees ($)

Strategy comparison

avalanche

Interest: $2,848

Months: 35

snowball

Interest: $2,848

Months: 35

Payoff Summary

Avalanche strategy

Time to debt-free

2 years and 11 months

35 months

Total interest

$2,848

$2,650 in today's dollars

Total amount paid

$17,848

Per-debt summary

Credit card

Interest: $670Paid off in month 17

Personal loan

Interest: $2,178Paid off in month 35

Estimate only. Assumes minimums on all debts and extra toward one debt per month. For personalised debt advice, consider a financial counsellor.

How to Use This Calculator

1Add each debt with its balance, interest rate (APR) and minimum payment
2Enter any extra amount you can pay each month beyond minimums
3Choose your payoff strategy - snowball or avalanche
4See the payoff order, total interest paid and months to debt-free

How Do Debt Payoff Strategies Work?

Both strategies pay minimums on all debts and direct extra payments to one debt at a time. The difference is which debt gets the extra money.

Snowball targets the smallest balance first for quick wins and motivation. Avalanche targets the highest interest rate first to minimise total interest paid.

Snowball vs Avalanche

Snowball method: Pay off smallest balance first. Satisfying quick wins keep you motivated.
Avalanche method: Pay off highest interest first. Mathematically saves the most money.
Extra payments: Even $50/month extra can shorten payoff by years and save thousands in interest.
Minimum payments: Always pay at least the minimum on every debt to avoid fees and credit damage.

What changes how fast a debt clears

•Every extra dollar paid above the minimum comes off the principal, so it stops accruing interest for the rest of the term. The calculator above shows the effect on your own figures.
•A lump sum applied to the highest-rate debt saves the most interest; applied to the smallest balance it clears an account soonest. The two orderings are compared above.
•Consolidating several debts into one loan replaces the rates and terms you have with a single rate and term. Whether the total interest falls depends on the new rate, the new term and any establishment or exit fees — a lower repayment over a longer term can cost more overall.
•Closing a card after paying it off removes the available credit from your file. Lenders assess available limits as well as balances, and credit reporting treats account age and utilisation differently, so the effect runs both ways.

Frequently Asked Questions

Official Sources

Moneysmart managing debt

Estimates only. Not financial or tax advice. Full disclaimer for your rights and our limitations of liability.

About this calculator

This calculator exists to show you the arithmetic. It applies published Australian rates, thresholds and formulas to the numbers you enter and shows the working, so you can check it. That is all it does — it produces a number and describes what the number is. It does not recommend anything and it holds no opinion about any financial product.

What can move this result

It only knows the figures you type in. Offsets, deductions, prior-year losses, other income, your partner's position and anything you have not entered are not in the result, and any of them can move it a long way.
Rates and thresholds change, sometimes mid-year and occasionally with retrospective effect. Each calculator shows the financial year and the verification date it is working from — outside that year the result is wrong rather than approximate.
Assumptions are set to a reasonable default and every non-statutory one can be changed. Defaults are not predictions, and a small change to a growth or inflation assumption compounds into a large change in a long projection.
Where a result reaches two or more years into the future it is shown in today's dollars as well as future dollars, because a future-dollar figure overstates what the money will actually buy.
It is a generic calculator. It is not built around any particular product, it does not compare the market, and it cannot tell you whether a product is suitable for you.

This calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product. Before you make a financial decision, consider obtaining advice from someone who holds an Australian Financial Services Licence. We do not, and we cannot advise you.

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Debt Payoff Calculator

See how long it takes to become debt-free with snowball or avalanche and how much interest you pay.

About this calculator

What can move this result

It only knows the figures you type in. Offsets, deductions, prior-year losses, other income, your partner's position and anything you have not entered are not in the result, and any of them can move it a long way.
Rates and thresholds change, sometimes mid-year and occasionally with retrospective effect. Each calculator shows the financial year and the verification date it is working from — outside that year the result is wrong rather than approximate.
Assumptions are set to a reasonable default and every non-statutory one can be changed. Defaults are not predictions, and a small change to a growth or inflation assumption compounds into a large change in a long projection.
Where a result reaches two or more years into the future it is shown in today's dollars as well as future dollars, because a future-dollar figure overstates what the money will actually buy.
It is a generic calculator. It is not built around any particular product, it does not compare the market, and it cannot tell you whether a product is suitable for you.