Debt Payoff Calculator

The avalanche method targets the debt with the highest interest rate first, saving you the most money on interest over time. The snowball method targets the smallest balance first, giving you quicker wins that can keep you motivated. Both methods have you make minimum payments on all debts, then direct extra payments to the target debt. Mathematically, avalanche always saves more, but snowball has better psychological completion rates.

Even $50-100 extra per month can dramatically reduce your payoff time and total interest. The key is consistency. Look at your budget for subscriptions you can cut, meals out you can reduce, or side income you can earn. Any extra payment goes directly toward principal, which reduces the interest that accrues the following month.

A common rule: if your debt interest rate exceeds what you could earn investing (roughly 7-10% historically for stocks), prioritize paying off the debt. Always pay off high-interest debt (credit cards at 15-25%) before investing beyond your employer match. For low-interest debt like mortgages (3-5%), investing often makes more mathematical sense.

Debt consolidation combines multiple debts into one payment, ideally at a lower interest rate. It can help if you qualify for a lower rate (balance transfer cards, personal loans) and commit to not accumulating new debt. However, consolidation alone doesn't reduce what you owe — it just restructures payments. The real savings come from the lower interest rate and consistent payments.