Debt Payoff Calculator — Avalanche vs Snowball

How the debt payoff planner works

Each month the planner:

1. adds a month’s interest to every debt (APR ÷ 12)
2. pays the minimum payment on every debt so you never miss one
3. puts everything else in your budget towards your target debt, chosen by the strategy you pick
4. when a debt is cleared, rolls its payment on to the next target. This is the “snowball” or “avalanche” effect.

It keeps going until every balance reaches zero, for up to 50 years. If your budget can’t outpace the interest, it tells you plainly rather than showing a misleading date.

Avalanche vs snowball: a worked example

Three debts totalling £11,900 (a £3,500 credit card at 24.9%, a £900 store card at 29.9%, and a £7,500 loan at 8.9%) with a budget of £600 a month:

Strategy	Debt-free in	Total interest
Avalanche (highest APR first)	23 months	£1,563
Snowball (smallest balance first)	23 months	£1,563

Here the avalanche saves £0. The gap is small because the smallest debt also has the highest rate. It grows when a large debt carries the highest APR.

Which method should you choose?

• Avalanche is mathematically optimal. Choose it if you’re motivated by the total saved.
• Snowball gives quick wins. Clearing a card completely in month three can keep you going. Research suggests that for some people the motivation is worth more than the extra interest.

Either is far better than paying only the minimums, which are designed to keep you in debt for years.

Minimum payments explained

UK credit card minimums are usually 1% of the balance plus that month’s interest, or a fixed floor (often £5–£25), whichever is higher. Some cards use a flat percentage such as 2.5% or 3%. Enter each card’s rule as shown on your statement. If you set the percentage to 0, the payment is treated as a fixed amount, which suits loans and car finance.

Paying only the minimum on a £3,000 card at 24.9% takes about 15 years and costs around £5,000 in interest. The FCA’s persistent debt rules exist because so many people get stuck this way.

Ways to get debt-free faster

• Balance transfer. Move card debt to a 0% deal and pay it down before the promotion ends.
• Debt consolidation loan. Only if the rate is lower and you don’t build the card balances up again.
• Overpay with windfalls. Tax refunds and bonuses go furthest on your highest-APR debt.
• Cut the budget leak. Even £50 a month more can bring your debt-free date forward by months.

Getting help

If you’re struggling to make minimum payments, you’re not alone, and free help is available. StepChange, National Debtline and Citizens Advice offer free, confidential, FCA-regulated advice. Avoid companies that charge fees for debt solutions you can get for free.