Comprehensive Guide
Learn more in our Loans & Mortgage Guide.
How it works
Two popular payoff strategies compete: snowball (pay off smallest balance first for psychological wins) vs avalanche (pay off highest interest rate first for mathematical savings). The avalanche method always saves the most money because it eliminates the most expensive debt first. But the snowball method produces faster "wins" — you eliminate entire debts sooner, which builds momentum. The calculator runs both simulations with your exact debts and extra payment to show the real difference in months and dollars. Building wealth is not about earning more — it is about the gap between what you earn and what you spend. A person earning $200,000 who spends $195,000 builds less wealth than someone earning $60,000 who spends $40,000. The savings rate matters more than the income level. Start by automating your savings on payday so the money never hits your checking account where you can spend it. Every field in this calculator exists for a reason. Enter Loan 1 balance, Loan 1 interest rate (%), Loan 1 minimum payment, Loan 2 balance, Loan 2 interest rate (%), and the engine recomputes the results instantly — no signup, no email, and nothing is sent to a server, because the math runs entirely in your browser. Change one input at a time to see which lever moves the result most; that sensitivity, not any single number, is usually the real insight. The worked example below the form uses realistic defaults so you can sanity-check the output before trusting it with your own figures, and the formula is published on the page so you can verify every step of the arithmetic yourself.Formula
Snowball: Pay minimums on all, extra goes to smallest balance. Avalanche: Pay minimums on all, extra goes to highest rate.
Tips
- Avalanche saves the most money — always mathematically optimal.
- Snowball produces faster wins — often better for motivation.
- The dollar difference between strategies is usually small ($200–2,000).
- The best strategy is the one you will actually stick with.
Frequently asked questions
Which is better, snowball or avalanche?
Mathematically: avalanche (saves the most interest). Psychologically: snowball (faster wins). For most people, the difference is $200–2,000 total. Choose the one that keeps you motivated.
How much extra should I pay?
As much as you can afford without sacrificing your emergency fund. Even $50–100/month extra accelerates payoff significantly. Every extra dollar goes directly to principal.
What does the loan payoff strategy comparison calculate?
It takes loan 1 balance, loan 1 interest rate (%), loan 1 minimum payment, loan 2 balance, loan 2 interest rate (%), loan 2 minimum payment, extra monthly payment as inputs and computes snowball: months to payoff, snowball: total interest paid, avalanche: months to payoff, avalanche: total interest saved, recommended strategy. The primary output is avalanche: months to payoff. Compare snowball, avalanche, and custom payoff strategies to find the fastest or cheapest way to eliminate debt.