Dave Ramsey popularised the snowball: clearing the smallest debt first gives a quick win, and the freed-up payment rolls into the next debt like a growing snowball. Studies have found the quick wins help people stick with repayment. Everything is calculated in your browser, so nothing you type is sent to our server.
How to use the Debt Snowball Calculator
- Number of debts
- Debt 1 – balance
- Debt 1 – interest rate
- Debt 1 – minimum payment
- Debt 2 – balance
- Debt 2 – interest rate
- Debt 2 – minimum payment
- Debt 3 – balance
- Debt 3 – interest rate
- Debt 3 – minimum payment
- Debt 4 – balance
- Debt 4 – interest rate
- Debt 4 – minimum payment
- Debt 5 – balance
- Debt 5 – interest rate
- Debt 5 – minimum payment
- Debt 6 – balance
- Debt 6 – interest rate
- Debt 6 – minimum payment
- Extra monthly payment
- Payoff method
- Consolidation loan rate (to compare)
- Consolidation loan term
- Consolidation loan fee
Everything runs in your browser, so results appear instantly and nothing you type is sent to a server.
How it works
Choose how many debts you have and enter each balance, rate and minimum payment, your extra monthly payment and the payoff method; optionally compare a consolidation loan.
Tips
- Compare loans by APR and total cost, not just the monthly payment.
- Extra payments go straight to principal and can save a lot of interest.
- Pay off the highest-rate debt first if you want to save the most money.
- Check for prepayment penalties before paying a loan off early.
Common mistakes to avoid
- Stretching a loan term to lower the payment without seeing the extra interest.
- Paying only the minimum on credit cards.
- Forgetting fees that are rolled into the loan.
Formula
Each month every debt gets its minimum payment; the extra payment (plus minimums freed up by debts already repaid) goes to the target debtSnowball target = smallest balance; avalanche target = highest interest rateInterest each month = balance × rate ÷ 12Consolidation: one loan with payment = (total + fee) × i ÷ (1 − (1 + i)^−n)Worked example
Inputs — Number of debts: 3; Debt 1 – balance: $2,500; Debt 1 – interest rate: 12 %; Debt 1 – minimum payment: $75; Debt 2 – balance: $6,000; Debt 2 – interest rate: 24 %; Debt 2 – minimum payment: $150; Debt 3 – balance: $12,000; Debt 3 – interest rate: 8 %; Debt 3 – minimum payment: $250; Debt 4 – balance: $3,000; Debt 4 – interest rate: 12 %; Debt 4 – minimum payment: $60; Debt 5 – balance: $1,500; Debt 5 – interest rate: 27 %; Debt 5 – minimum payment: $40; Debt 6 – balance: $8,000; Debt 6 – interest rate: 6 %; Debt 6 – minimum payment: $180; Extra monthly payment: $200; Payoff method: Debt snowball – smallest balance first; Consolidation loan rate (to compare): 11 %; Consolidation loan term: 48 months; Consolidation loan fee: $300.
Results — Total debt = $20,500; Total minimum payments = $475; Monthly payment budget = $675; Months to be debt-free = 37; Total interest = $4,217.13; Total paid = $24,717.13.
Frequently asked questions
What is the debt snowball method?
Paying off debts from smallest to largest balance, regardless of interest rate.
Does the snowball method cost more?
Usually a little more interest than the avalanche – check the comparison.
Should my mortgage be in the snowball?
It's usually left out.
What formula does the Debt Snowball Calculator use?
Each month every debt gets its minimum payment; the extra payment (plus minimums freed up by debts already repaid) goes to the target debt.