$
On top of the minimum payments
Debt-free in
2 years 7 months
Paying $780 a month: your minimums plus $200 extra
- Total interest
- $3,005
- Minimums only
- 4 years 5 months
- What you owe now$21,000
- Interest$3,005
What this means
Avalanche pays the highest interest rate first, which costs the least in interest. The snowball method would cost $366 more.
Each time a debt is paid off, its payment moves to the next one, so your payments snowball while the total you pay each month stays the same.
Compare the plans
| Avalanche | Snowball | Minimums only | |
|---|---|---|---|
| Debt-free in | 2 years 7 months | 2 years 8 months | 4 years 5 months |
| Total interest | $3,005 | $3,371 | $5,545 |
| Total paid | $24,005 | $24,371 | $26,545 |
Avalanche saves $366 in interest against snowball.
Payoff order
- 1.Credit cardcleared in 1 year 5 months
- 2.Personal loancleared in 1 year 10 months
- 3.Car loancleared in 2 years 7 months
Assumptions in this estimate
- Each month, interest is added to every debt and each gets its minimum. Everything else goes to the debt first in line, and when a debt is cleared, its minimum moves to the next one.
- Avalanche pays the highest interest rate first, which saves the most interest. Snowball pays the smallest balance first, so you clear whole debts sooner.
- Interest is added monthly at one-twelfth of the yearly rate. Assumes fixed rates, no new borrowing, and no fees.
- Minimums are treated as fixed amounts. Credit card minimums usually fall as the balance falls.