Debt Payoff Planner: Snowball vs Avalanche Calculator

How the math works

This calculator runs the same payoff simulation four times and lays the results side by side: once for the snowball order, once for the avalanche order, once for a hybrid of the two, and once for a minimums-only baseline. The debts, the monthly budget, the start month, and any what-if settings are identical in all four runs, so any gap between the rows comes from the payment order alone, not from different assumptions. The snowball calculator and avalanche calculator pages explain each ordering rule in more depth.

The engine works month by month. First, interest is added to every unpaid balance at a monthly rate of APR divided by 12, before any payment is applied. Next, each debt's minimum payment is covered — either the amount you entered or an estimate, described below. Whatever budget remains becomes the remainder for the month, and it flows to one target debt chosen by the active ordering rule; if the target clears and money is left, the surplus cascades to the next unpaid debt in the same order until the month's budget is spent.

Strategy ordering is recomputed every month from the balances carried into that month. Snowball targets the smallest remaining balance, breaking ties with the higher APR. Avalanche targets the highest APR, breaking ties with the smaller balance. Hybrid uses snowball order while more than K debts remain unpaid and switches to avalanche order once the unpaid count reaches K or below; K is adjustable from 1 to 10 and defaults to 3, which means with three or fewer debts a hybrid plan runs in avalanche order from month one.

The minimums-only baseline pays each debt exactly its minimum every month, with no extras, no lump sums, and no cascade of leftover money; unspent differences are simply not paid. The strategy plays no role in the baseline, so it is the same regardless of which strategy is selected, and it is the reference for the interest-saved column: savings equal baseline total interest minus plan total interest.

The what-if panel adds two levers. A per-debt extra is paid on top of the minimum and is capped at the remaining balance; a lump sum entered for a given month lands on that month's target debt first and then cascades down the current priority order. If the monthly budget is smaller than the total minimums, the plan enters shortfall mode: minimums are scaled down proportionally, the gap is reported as a shortfall number, and any extras and lump sums still apply.

The simulation rests on four stated assumptions. One: interest compounds monthly — balance times APR divided by 12, applied before payments. Two: when a minimum is left blank it is estimated as the largest of 2% of the balance, one month's interest plus 1% of the balance, or $25, capped at the balance; real lender formulas differ. Three: every simulation stops at 600 months, even if balances remain. Four: all internal math uses full double precision with no per-month rounding; displayed amounts are rounded half-up to the nearest cent after totals are computed.

One limitation to know: the engine uses the nominal APR divided by 12 as the monthly rate, which matches the standard US credit-card convention. Loans that accrue with a daily periodic rate produce slightly different month-to-month figures.