Debt Payoff Calculator
When you owe money on several debts, the order of repayment matters. This calculator runs both popular methods on your debts and shows when you will be debt-free and how much interest you will pay.
Results
Debt-free in
1 year, 4 months
- Total interest
- ₹37,067
- Total paid
- ₹3,27,067
- Interest saved vs paying only minimums
- ₹71,362
- Interest with the other method
- ₹37,067
- Total monthly payment
- ₹20,500
- Months
- 16
Using the avalanche method with ₹10,000 extra a month, you would be debt-free in 1 year, 4 months and pay ₹37,067 in interest.
Payoff order (3 rows)
| Order | Debt | Starting balance | APR | Paid off in month |
|---|---|---|---|---|
| 1 | Credit card B | ₹30,000 | 42% | 3 |
| 2 | Credit card A | ₹60,000 | 36% | 7 |
| 3 | Personal loan | ₹2,00,000 | 14% | 16 |
Show the calculation steps
- Your monthly budget = all minimum payments ₹10,500 + extra ₹10,000 = ₹20,500.
- Every month interest is added to each debt, minimum payments are made, and everything left goes to the debt with the highest interest rate.
- When a debt is cleared, its minimum payment rolls into the next one, so the budget stays the same.
- All debts are cleared after 16 months; total interest ₹37,067.
- Avalanche (highest interest first) minimises interest. Snowball (smallest balance first) gives quicker early wins. Assumes no new borrowing.
Avalanche and snowball
The avalanche method puts extra money on the debt with the highest interest rate first, which costs the least interest overall. The snowball method attacks the smallest balance first, giving quick wins that keep many people motivated.
The rollover effect
When a debt is paid off, its minimum payment does not disappear: it joins the extra money and goes to the next debt. This 'snowballing' of payments is what speeds the whole plan up.
Formula
Each month: interest = balance × APR ÷ 12 for every debt
Pay every minimum, then send all the remaining money to the target debt
Avalanche target = highest APR; snowball target = smallest balance
Where:
- Budget
- = Sum of all minimum payments plus the extra amount
Example calculation
Two cards and a personal loan with ₹10,000 extra a month
Inputs
- Extra Payment per Month
- ₹10,000
- Method
- Avalanche: highest interest rate first
Result
- Debt-free in
- 1 year, 4 months
- Total interest
- ₹37,067
- Total paid
- ₹3,27,067
- Interest saved vs paying only minimums
- ₹71,362
- Interest with the other method
- ₹37,067
- Total monthly payment
- ₹20,500
- Months
- 16
Step-by-step
- Your monthly budget = all minimum payments ₹10,500 + extra ₹10,000 = ₹20,500.
- Every month interest is added to each debt, minimum payments are made, and everything left goes to the debt with the highest interest rate.
- When a debt is cleared, its minimum payment rolls into the next one, so the budget stays the same.
- All debts are cleared after 16 months; total interest ₹37,067.
Important notes
- Assumes fixed rates, that you make no new borrowing, and that the total monthly payment stays constant.
Disclaimer: This calculator provides estimates for informational purposes and should not be considered financial advice. Actual figures from lenders, banks and investment products can differ because of fees, taxes, rounding rules and changing rates. Consult a qualified professional before making financial decisions.
Frequently asked questions
Which is better, snowball or avalanche?
Avalanche saves the most interest. Snowball can be easier to stick with. The calculator shows the interest for both.
What should I enter for the minimum payment?
The minimum your lender requires each month. It must be more than the monthly interest for the plan to work.
Should I consolidate my debts?
It can help if the new rate is lower and there are no large fees. Use the loan refinancing calculator to compare.
Related calculators
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- Credit Card Interest CalculatorFind how much interest a credit card balance costs per day and per month, and the effective yearly rate with compounding.
- Credit Utilization CalculatorCalculate how much of your total credit limit you use, per card and overall, and how much to pay down to reach a target.
- Debt-to-Income Ratio CalculatorCalculate your debt-to-income ratio from monthly debt payments and gross income, and see how a new loan would change it.
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