worldofcalcsDebt Payoff Calculator
This plan saves ₹48,806 in interest and 14 months compared with paying only the minimums.
Payoff order
- Credit card: paid off in month 9
- Personal loan: paid off in month 21
- Bike loan: paid off in month 21
Compare strategies
| Strategy | Payoff Time | Total Interest |
|---|---|---|
| Avalanche (Highest Interest First) | 1 year 9 months | ₹45,738 |
| Snowball (Smallest Balance First) | 1 year 9 months | ₹52,661 |
| Minimum payments only | 2 years 11 months | ₹94,544 |
About Debt Payoff Calculator
Compare debt payoff strategies like Avalanche and Snowball to become debt-free faster.
Features
- Supports Avalanche and Snowball strategies.
- Calculates total interest saved.
- Handles multiple debts with custom rates.
How to Use
- Add your debts including balance and interest rate.
- Enter an extra monthly payment amount if any.
- Select your preferred payoff strategy.
- View your debt-free date and total savings.
Common Uses
- Credit card debt consolidation.
- Student loan payoff planning.
- Mortgage pre-payment analysis.
Avalanche or snowball: how to clear several debts
When you owe on more than one card or loan, the order in which you repay them changes how much interest you pay. Both popular methods work the same way: pay the minimum on every debt, put any extra money towards one target debt, and when that debt is cleared, roll its payment into the next one. The avalanche method targets the highest interest rate first and costs the least. The snowball method targets the smallest balance first, so you close accounts sooner and stay motivated. This calculator runs both month by month and compares them with paying only the minimums.
How the payoff plan is calculated
Each month, interest is added to every balance at its monthly rate (annual rate ÷ 12). The minimum is paid on every debt, and the rest of the budget goes to the target debt: highest rate first for avalanche, smallest balance first for snowball. The budget stays the same until you are debt-free, so a cleared debt's minimum rolls over to the next target. The plan assumes no new borrowing and fixed rates.
Tips for getting out of debt
- Credit card balances (30%–48% a year) should almost always be cleared first. Few investments reliably earn more than that.
- Never skip a minimum payment or EMI to speed up another debt. Missed payments add late fees and hurt your credit score.
- If the snowball keeps you going, use it. The difference in interest is often small next to the cost of giving up halfway.
- Banks cannot charge prepayment or foreclosure fees on floating-rate loans to individuals. Fixed-rate personal loans often charge 2%–5%, so check before prepaying.
- A cheaper personal loan used to repay card balances can cut the interest a lot, as long as you stop adding new card debt.
- Keep a small emergency fund while you repay, so an unexpected bill doesn't go back on the card.
- Home loans are usually the cheapest debt and may give a tax deduction under the old regime, so they normally come last.
Worked example: a card, a personal loan and a bike loan
- Debts: credit card ₹60,000 at 42% (minimum ₹3,000), personal loan ₹2,00,000 at 14% (EMI ₹7,000), bike loan ₹40,000 at 12% (EMI ₹2,000)
- Minimums add up to ₹12,000 a month. With ₹5,000 extra, ₹17,000 goes towards the debts every month
- Avalanche: the extra goes to the card first, which is cleared in month 9. Debt-free in 21 months, with ₹45,738 in total interest
- Snowball: the extra clears the bike loan in month 6 and the card in month 13. Also debt-free in 21 months, but with ₹52,661 in interest
- Paying only the minimums takes 35 months and costs ₹94,544 in interest, so the avalanche plan saves ₹48,806
How extra payments change the plan
The same three debts (₹3,00,000 in total) with different extra payments each month on top of the minimums.
| Extra a month | Avalanche: months | Avalanche: interest | Snowball: interest | Saved vs minimums |
|---|---|---|---|---|
| ₹0 | 33 | ₹90,687 | ₹90,687 | ₹3,858 |
| ₹2,000 | 26 | ₹62,322 | ₹70,262 | ₹32,222 |
| ₹5,000 | 21 | ₹45,738 | ₹52,661 | ₹48,807 |
| ₹10,000 | 16 | ₹32,997 | ₹37,872 | ₹61,548 |
Savings compare the avalanche plan with paying only the minimums (₹94,544 interest over 35 months). Even with no extra, rolling cleared minimums into the next debt saves interest.