Smart Calculator

Debt Payoff Calculator

Debt Payoff Calculator

Use the debt avalanche method to pay off your debts faster and save on interest with extra payments.

Debt Payoff Calculator

Extra Payments

Reallocate payments from paid-off debts to remaining debts

Your Debts

Debt 1

Debt 2

Payoff Results
Your debt avalanche strategy

Enter your debt information to see your payoff strategy

How the Debt Avalanche Works

The debt avalanche method is a mathematically optimal debt repayment strategy that minimizes the total interest you'll pay over time.

  1. List all debts with their balances, minimum payments, and APRs
  2. Make minimum payments on all debts to avoid penalties
  3. Apply extra payments to the debt with the highest interest rate first
  4. Once paid off, redirect all payments to the next highest-rate debt
  5. Repeat until all debts are eliminated
Inputs You Provide

For Each Debt:

  • • Current balance (Bi)
  • • Minimum monthly payment (mi)
  • • Annual APR (ri)

Optional Extra Payments:

  • • Extra per month (Emonthly)
  • • Extra per year (Eannual)
  • • One-time extra payment (Eone-time)
  • • Fixed total amount mode (Yes/No)
Formulas and Calculation Logic

1. Interest Accrual

Ii(k) = Bi(k-1) × (ri ÷ 12)

Monthly interest = Previous balance × Monthly rate

2. Balance After Interest

B̃i(k) = Bi(k-1) + Ii(k)

3. Payment Application

Bi(k) = max(0, B̃i(k) - Pi(k))

New balance = max(0, Balance after interest - Payment)

4. Avalanche Priority

Extra payments are applied to debts in order of highest APR first, with balance as tiebreaker (lowest first).

Example Debt Payoff Schedule

Example Scenario:

  • • Credit Card A: $5,000 at 18.99% APR, $100 minimum
  • • Credit Card B: $3,000 at 24.99% APR, $75 minimum
  • • Extra monthly payment: $200
  • • Fixed total mode: Yes

Strategy Result:

  • • Pay minimums: $175 total
  • • Apply extra $200 to Card B (higher APR)
  • • Card B paid off first in ~11 months
  • • Reallocate Card B's $275 payment to Card A
  • • Total payoff time: ~18 months
  • • Interest saved vs. minimum payments: ~$2,400
FAQs

What is the debt avalanche method?

The debt avalanche method prioritizes paying off debts with the highest interest rates first while making minimum payments on all other debts. This mathematically optimal approach minimizes total interest paid over the life of your debts.

Should I use avalanche or snowball?

Debt avalanche saves more money on interest compared to debt snowball (paying smallest balances first). However, debt snowball may provide more psychological motivation through quick wins. Choose avalanche for maximum savings, snowball for motivation.

How do extra payments affect my debt payoff?

Extra payments dramatically reduce payoff time and interest costs. Even an extra $50/month can save thousands in interest and years of payments. The calculator shows exactly how much time and money you'll save with different extra payment amounts.

What is "Fixed Total Amount" mode?

When enabled, payments from paid-off debts are automatically reallocated to remaining debts, maintaining your total monthly payment amount. This accelerates payoff of remaining debts. When disabled, your total payments decrease as debts are eliminated.