How the plan works
You pay the same total every month: every debt’s minimum payment plus any extra you choose. Each month:
- Interest is added to each debt: its balance × APR ÷ 12, rounded to the cent.
- Every debt gets its minimum payment.
- The extra goes to the debt at the top of the order. If that pays it off, what’s left goes to the next one.
When a debt is paid off, the minimum you were paying on it stays in the budget and goes to the next debt in the order, so the amount aimed at the remaining debts keeps growing. The totals, the payoff dates and the CSV all come from the same month-by-month plan.
Highest rate first or smallest balance first
- Highest rate first, often called the avalanche method, puts the extra on the debt with the highest APR. If two debts have the same APR, the smaller balance goes first.
- Smallest balance first, often called the snowball method, puts the extra on the smallest balance. If two balances are equal, the higher APR goes first.
The order is set from the balances and rates you enter today. The calculator works out both orders every time, so you can compare them directly.
Worked example
The calculator’s starting debts: a credit card with $3,500 at 24.99% (minimum $105), a car loan with $9,800 at 6.9% (minimum $310) and a store card with $900 at 19.99% (minimum $35). That’s $450 of minimums, plus $200 extra, so $650 a month.
Highest rate first pays the credit card, then the store card, then the car loan. Smallest balance first starts with the store card, then the credit card and the car loan.
| With $200 extra | Highest rate first | Smallest balance first |
|---|---|---|
| First debt paid off | Month 14 | Month 4 |
| Debt-free | Month 25 | Month 25 |
| Total interest | $1,588.90 | $1,633.73 |
With highest rate first, the first month’s $650 is split $305 to the credit card ($105 minimum plus the $200 extra), $310 to the car loan and $35 to the store card.
Which order suits you?
Neither is right for everyone. Putting the extra on the highest rate usually costs less interest, because the most expensive balance shrinks first. In the example it saves $44.83. Putting it on the smallest balance clears individual debts sooner, which means fewer separate payments to keep track of. In the example, the first debt is gone 10 months earlier.
How much the choice matters depends on your debts. When the rates are close, or the extra is small, the two orders come out similar. With minimum payments only, the example gives the same result either way: 40 months and $3,478.87 of interest. Try your own figures and compare.
How much the extra changes
For the example debts, paying highest rate first:
| Extra each month | Debt-free in | Total interest |
|---|---|---|
| None (minimums only) | 3 years 4 months | $3,478.87 |
| $100 | 2 years 6 months | $2,109.15 |
| $200 | 2 years 1 month | $1,588.90 |
| $400 | 1 year 7 months | $1,108.97 |
Where your figures are kept
Everything is calculated in your browser. The debts you enter are kept in the page address after the “#”, so a bookmark or the “Copy link” button brings the plan back. That part of the address isn’t sent to our server, but anyone you share the link with will see the names and amounts, so leave names out if you’d rather not share them.
Assumptions and limitations
- Each debt’s APR stays the same. Intro rates that end, penalty rates and fees aren’t modeled. For a card with an intro rate, use the Credit Card Payoff Calculator.
- Minimum payments stay at the amounts you enter. Card minimums often fall as the balance falls, so paying only the required minimum would take longer than shown. Keeping the amount fixed is what lets the freed-up money move to the next debt.
- Interest is charged monthly on each balance. Many lenders use a daily rate, so statements will differ slightly.
- No new purchases or borrowing are added, and every payment is made in full and on time.
- Each lender’s statement has the exact balance and interest for that debt.
Questions
What if a debt’s minimum doesn’t cover its interest?
Its balance grows until the extra reaches it, and the calculator notes this under “This month’s payments”. If your total payments don’t cover the total interest, the plan can’t work, and the calculator asks for a larger extra amount.
Should I consolidate my debts instead?
A consolidation loan can lower the rate, but fees and a longer term can make it cost more overall. Use the Loan Calculator to work out the loan’s payment and total interest, and compare it with the total interest shown here.
Can I include a mortgage or car loan?
Yes. Enter the balance, the rate and the regular payment as the minimum. Loans with a fixed payment are paid off on schedule, and the plan shows what happens when extra goes to them.