Debt Payoff Calculator

You pay the minimum on every debt and put every extra dollar toward the debt with the highest interest rate. When it's paid off, its payment rolls into the next highest rate. It minimizes total interest. In our example, it costs $1,569 in interest against $1,633 for snowball, with an $800 monthly budget.

You pay the minimum on every debt and put every extra dollar toward the smallest balance, whatever its rate. Each paid-off debt frees up its payment for the next. It usually costs a little more interest than avalanche, but it gives you early wins. In our example, the first debt is gone in month 4 instead of month 14.

Avalanche always costs the same or less in interest, so it's better on paper. Snowball can be better in practice if early wins help you stay on track. The gap is often small. In our example it's $64 over 22 months. Switch methods in the calculator to see the difference for your own debts.

At 24% interest, paying $150 a month takes 56 months and costs about $3,322 in interest. Doubling the payment to $300 a month clears it in 21 months for about $1,143 in interest. Add the card to the list above, set your budget and the calculator will show your exact payoff month.

Most people benefit from a small emergency fund first, such as $1,000 or one month of expenses, so a surprise cost doesn't go on a card. After that, paying off debt at 20% interest is a guaranteed 20% return, which is hard to beat by investing. Keep contributing enough to get any employer 401(k) match, because that's free money.

Usually, yes. Lower card balances reduce your credit utilization, which is a major factor in most scores. Paying on time every month helps your payment history. Closing a paid-off card can lower your available credit, though, so many people keep old cards open with a zero balance.

It's a new loan, often a personal loan, that pays off several debts so you make one payment at a single rate. If the new rate is lower than your card rates, you pay less interest. Watch for origination fees and a longer term, which can raise the total cost. Use our personal loan calculator to compare.

A 0% balance transfer card can save a lot of interest if you clear the balance before the promotion ends. Most charge a fee of 3% to 5% of the amount moved. Divide the balance by the months in the promotion to see the payment you'd need. If you can't make it, the remaining balance moves to the card's regular rate.

You'd fall behind, which can mean late fees, penalty rates and damage to your credit. The calculator flags this. Call your lenders before you miss a payment. Many offer hardship plans, and a nonprofit credit counseling agency can set up a debt management plan with lower rates.

You can, but most people leave it out. Mortgages usually have low rates and long terms, so the avalanche method would put them last anyway. Focus on high-rate debts such as credit cards, then car and personal loans. Once those are gone, you can decide whether extra mortgage payments beat investing.

Set a debt-free date and track it. Watching the total fall each month helps, so check the chart above as balances drop. Automate payments so you don't have to decide each month. Celebrate each paid-off debt in a small, cheap way, and redirect any raise or windfall to the current target.