Debt Snowball Calculator
Visualize your path to becoming debt-free and see how much interest you can save.
Your Debts
Your Debt-Free Journey
New Debt-Free Date
-
Total Interest Saved
$0
This is an estimate for informational purposes and does not constitute financial advice.
About the Debt Snowball Calculator
The debt snowball method is a powerful strategy for paying off debt, focusing on building momentum to keep you motivated. This calculator helps you create a customized payoff plan. You can list all your debts, add an extra monthly payment (your "snowball"), and see exactly when you'll become debt-free and how much you'll save in interest compared to only making minimum payments.
Formula Explained
The calculator simulates your debt payoff month by month:
- Order Debts: It first sorts your debts from the smallest balance to the largest.
- Apply Payments: Each month, it applies the minimum payment to all debts. Then, it adds your extra "snowball" payment to the minimum payment of the smallest debt.
- Snowball Growth: Once the smallest debt is paid off, its minimum payment is rolled into the snowball. This larger snowball is then applied to the next-smallest debt. This process repeats, with the snowball growing larger after each debt is eliminated, until all debts are paid off.
How to Pay Off Debt Faster
Accelerating your debt-free journey requires discipline and strategy. Here's how to build a bigger snowball:
Increase Your Income
Consider a side hustle, freelance work, or selling items you no longer need. Every extra dollar can go directly to your snowball.
Cut Expenses
Create a detailed budget and identify areas where you can cut back, such as subscriptions, dining out, or entertainment costs.
Negotiate Lower Interest Rates
Call your credit card companies and ask for a lower interest rate. A good payment history can often lead to a reduction, saving you money.
Apply Windfalls
Use any unexpected money, like a tax refund or bonus, to make a large lump-sum payment on your smallest debt.
Frequently Asked Questions
What is the debt snowball method? →
The debt snowball method is a debt-reduction strategy where you pay off debts in order of smallest balance to largest, regardless of interest rate. You make minimum payments on all debts, then apply any extra money to the smallest debt until it is paid off. Once it's gone, you roll that payment amount into the payment for the next-smallest debt, creating a 'snowball' effect.
Is the debt snowball or debt avalanche method better? →
Mathematically, the debt avalanche method (paying off the highest-interest debt first) will save you more money on interest. However, the debt snowball method is often more effective psychologically. The quick wins from paying off smaller debts first provide motivation to keep going, which can be more important for long-term success.
What kind of debts can I use with the debt snowball method? →
The debt snowball method works well for most types of consumer debt, including credit card balances, personal loans, medical bills, and auto loans. It is generally not used for a mortgage, which is a long-term, secured debt.
How much extra should I pay each month? →
Any amount you can pay above the minimum payments will accelerate your debt payoff. Start by creating a budget to see how much extra cash you can find. Even an extra $50 or $100 per month can make a significant difference in how quickly you become debt-free and how much interest you save.
What happens when a debt is paid off? →
When you pay off a debt using the snowball method, you take the full amount you were paying on that debt (the minimum payment plus your snowball amount) and add it to the minimum payment of the next-smallest debt. This is how the 'snowball' grows larger and more powerful over time, knocking out subsequent debts even faster.