Compare the snowball and avalanche methods on up to four debts.
Interest saved with avalanche
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Avalanche: interest / months
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Snowball: interest / months
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Worked example
Take three debts: 80,000 at 36% with a 3,000 minimum, 150,000 at 18% with a 4,000 minimum, and 50,000 at 24% with a 2,000 minimum, plus 5,000 extra to throw at them each month. The avalanche method attacks the 36% debt first because it bleeds the most interest, then the 24% one, then the 18% one. It clears all three in 32 months and costs about 77,561 in interest. The snowball method instead clears the smallest balance first, the 50,000 debt, for quick motivation. It takes 33 months and costs about 87,269 in interest. Both pay the same minimums and the same 5,000 extra, but ordering by rate rather than balance saves roughly 9,708 in interest here, the price of the motivation the snowball offers.
| Method | Months | Interest (PHP) |
|---|---|---|
| Avalanche (highest rate first) | 32 | ₱77,561 |
| Snowball (smallest balance first) | 33 | ₱87,269 |
| Interest saved with avalanche | ₱9,708 |
How it is calculated
The calculator runs a month-by-month simulation of all your debts under each strategy on the same inputs. Every month it accrues interest on each open balance at that debt's monthly rate, pays the minimum on every debt, then pools your extra payment plus any freed-up minimums and throws it at one target debt. The avalanche method targets the highest interest rate first, which mathematically always costs the least interest and clears the debt soonest. The snowball method targets the smallest balance first, which usually costs a little more interest but delivers an early win by wiping out a whole debt quickly, which many people find easier to sustain. When a debt is cleared, its freed-up payment rolls onto the next target, the snowball effect that accelerates both methods. The tool reports months and total interest for each, plus the interest the avalanche saves. If a debt's minimum cannot beat its monthly interest, that debt never clears, and the tool flags it so you know to raise the payment.