Debt Repayment Calculator: Avalanche or Snowball
By the Bureau of Wealth team Updated
This calculator is general information, not financial advice. Check your own figures with the provider or a qualified adviser before acting on them.
Enter each debt's balance, APR and minimum payment, set the total you can repay each month, and see your debt-free date, the order your debts clear and what you save over paying only the minimums.
What this calculator assumes
- Each debt's APR stays the same and interest is added monthly at the APR divided by 12.
- Minimum payments are fixed amounts. Credit card minimums usually shrink as the balance falls, so the minimums-only comparison is a guide rather than what your statements will show.
- You repay the full monthly budget every month, cover every minimum first, and put whatever is left towards one debt at a time.
- When a debt is cleared, its minimum payment stays in your budget and moves on to the next debt.
- You borrow nothing new on any of the debts. Fees, 0% promotional periods and early settlement charges are not included.
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How the plan is worked out
Each month the calculator adds a month of interest to every debt, pays the minimum on each, and puts the rest of your budget towards a single target debt. When that debt is cleared, everything that was going to it, including its old minimum, moves on to the next target. Your total repayment never drops, so the amount going to each new target keeps growing. The calculator repeats this until every balance is zero, then shows how many months it took, the total interest and when each debt was cleared.
It also runs a second plan where you pay only the minimums, with nothing extra and no rollover when a debt clears. The difference in interest between the two plans is the saving shown with the result.
Avalanche or snowball
The avalanche method sends your spare money to the debt with the highest APR first. MoneyHelper recommends this order for non-priority debts such as credit cards, overdrafts and personal loans: look at the debts with the most expensive interest rates, and keep paying at least the minimum on everything else so you avoid extra fees and damage to your credit score. The snowball method targets the smallest balance first instead, so you clear individual debts sooner, usually at a higher total cost.
A worked example
Say you owe £4,000 on a credit card at 24.9% APR with a £120 minimum, £2,000 on a personal loan at 12.9% with a £95 minimum, and £8,000 on car finance at 8.9% with a £230 minimum. You can repay £600 a month in total.
With avalanche, the credit card clears in month 18, the personal loan in month 20 and the car finance in month 27. You pay £2,128.61 in interest. With snowball, the personal loan is gone by month 9, but you finish in month 28 and pay £2,319.81, about £191 more. Paying only the minimums would take 58 months and cost £4,441.81 in interest. Raising the budget to £750 with avalanche clears everything in 21 months for £1,558.60.
Priority debts come first
MoneyHelper separates priority debts, where not paying can have the most serious consequences, from everything else. Rent, mortgage payments, Council Tax and energy bills are priority debts: falling behind can lead to eviction, losing your home or having your supply cut off. Keep those up to date before you put anything extra towards cards and loans, and leave them out of this calculator.
If most of what you owe is on one card, the credit card repayment calculator shows what monthly payment clears it by a date you choose and how long the minimum alone would take.
Frequently asked questions
Which is better, avalanche or snowball?
Avalanche usually costs less when your debts have different rates, because the most expensive balance shrinks first. Snowball gives you quicker wins, which some people find easier to stick with. Try both in the calculator to see the difference for your debts.
What should my monthly budget include?
Enter the total you can put towards these debts each month, including all the minimum payments. It has to be at least the sum of the minimums for the plan to work.
Should I include my mortgage or rent arrears?
No. MoneyHelper treats rent and mortgage payments as priority debts that need dealing with first. This calculator is for non-priority borrowing such as cards, overdrafts, personal loans and car finance.
Why does it say my debts would never be paid off?
If the interest added each month is more than you repay, the balance keeps growing. Raise the monthly budget or check the minimum payments and APRs you entered.
Where can I get free help with debt?
If you cannot keep up with your payments, talk to a free debt adviser before agreeing a repayment plan with anyone you owe. MoneyHelper has a debt advice locator that lists free, confidential services online, by phone and face to face.
Sources
Figures come from institutions millions of people rely on. How we keep calculators accurate.