Debt Payoff Calculator — Snowball vs Avalanche
Simulation assumes: interest accrues monthly on the remaining balance, you always pay every minimum payment, and all extra money plus freed-up minimums go to the target debt. No fees, penalties, or balance changes over time.
Debt Snowball vs Debt Avalanche
When you owe money on several debts at once, there are two well-known strategies for paying them off. Both work; they differ in which debt you attack first with extra payments — and that difference shapes how the journey feels.
The two strategies
| Debt snowball | Debt avalanche | |
|---|---|---|
| Pay minimums on | all debts | all debts |
| Extra money targets | the smallest balance | the highest interest rate (APR) |
| First debt cleared | fastest (smallest) | not necessarily |
| Total interest paid | usually more | usually less |
| Where it shines | motivation and momentum | math and total cost |
The snowball's idea is psychological: clearing a small debt quickly feels like a win, which keeps people motivated to continue. The avalanche's idea is mathematical: paying the highest-APR debt first minimizes the interest that accumulates while you pay.
How the calculator works
Enter each debt's balance, APR, and minimum payment, plus an extra monthly payment you can afford. The simulation runs both strategies month by month: interest accrues on each remaining balance, minimums are always paid, and every extra rupiah (plus each freed-up minimum once a debt is cleared) goes to the target debt.
Key assumptions: interest compounds monthly on the remaining balance, minimum payments stay constant, and no new debt is added. Real life often involves the last assumption failing — which matters more than the strategy you pick.
What the numbers usually show
The avalanche typically finishes first and pays less interest — the exact amount depends on your rates. The snowball usually takes a bit longer but delivers early wins. The "interest saved" figure the calculator shows is the difference between the two; it is real but it is also the price of motivation, and motivation is worth something.
The honest answer: the best strategy is the one you will actually stick to. People who abandon their plan halfway pay far more than the small difference between these two methods.
A worked example
Suppose two debts: a credit card with a Rp 10,000,000 balance at 24% APR (Rp 400,000 minimum) and a vehicle loan with Rp 20,000,000 at 12% (Rp 800,000 minimum), with Rp 500,000 extra per month.
- Snowball targets the credit card first: it is cleared quickly, then its minimum rolls into the vehicle loan.
- Avalanche targets the card too here (it has the higher rate) — but if the rates were reversed, the two strategies would diverge.
Try both with your own numbers above — seeing your own debts and dates makes the trade-off concrete.
Related reading
- Emergency fund calculator — build a buffer so unexpected costs don't create new debt
- Sinking fund vs emergency fund — the difference between saving for shocks and saving for planned expenses
- Compound interest calculator — what the same monthly amount could do on the investment side
This article is for general educational purposes only and is not personalized financial advice. Consider consulting a licensed financial advisor for guidance specific to your situation.