Debt Payoff Calculator

Frequently Asked Questions

• What is the debt avalanche method?

  Pay minimums on all debts; direct any extra money to the debt with the highest interest rate. Mathematically optimal — saves the most money over time.

• What is the debt snowball method?

  Pay minimums on all debts; direct extra money to the smallest balance. Creates psychological wins as debts disappear quickly, helping with motivation.

• Which method is better — avalanche or snowball?

  Avalanche saves more money. Snowball provides faster motivation. Choose snowball if you need wins to stay committed; choose avalanche if you can stay disciplined without them.

• How much extra should I pay each month?

  As much as your budget allows after essential expenses and a small emergency fund. Even an extra $50/month dramatically accelerates payoff.

• Should I pay off debt or invest first?

  Generally, pay off high-interest debt (>7-8% APR) before investing. For lower-rate debts (mortgage, student loans), consider doing both in parallel especially if you get an employer 401(k) match.

• Should I consolidate before paying off?

  Consolidation can help if it lowers your blended rate. Compare your existing weighted-average APR to a consolidation loan offer. Don't consolidate if you'll add new debt.

• Does the calculator account for variable rates?

  No — it assumes the APR you enter remains fixed throughout the payoff period. For variable-rate debts, use a slightly higher rate as a buffer.

• What about minimum payment increases?

  The calculator uses your stated minimum payment. In reality, credit-card minimums adjust as balances change. Our model is conservative — actual payoff is often slightly faster.

• How do balance transfers fit in?

  A 0% balance transfer card can save big interest if you can pay off the balance during the promo period. Factor in the transfer fee (typically 3%-5%) when comparing.

• Should I close paid-off credit cards?

  Generally no — closing accounts reduces your available credit and shortens credit history, both of which hurt your score. Keep old cards open and unused unless they have annual fees.