Balance over time
The combined balance across every debt, month by month, under the strategy you picked.
Combined balance across every debt
How it works
This runs a month-by-month simulation rather than a single formula, because which debt gets your extra payment can change every month. Each month, every debt with a balance above $0 accrues interest, then gets its minimum payment. Whatever's left of the extra monthly payment goes entirely to one debt — the "priority" debt, chosen by strategy: avalanche picks whichever active debt currently has the highest APR, snowball picks whichever active debt currently has the smallest balance. That priority pick is re-evaluated every single month, not fixed at the start, so it can shift once a debt clears. When a debt's balance reaches $0, its minimum payment doesn't vanish — starting the next month, that amount joins the extra-payment pool too, which is why payoff accelerates as debts clear. The simulation repeats until every balance is $0, or until it hits a 600-month safety cap, which only triggers if your minimum payments don't even cover the interest being charged.
each month, for every debt with balance > 0:
interest = balance × APR ÷ 12 ÷ 100; balance += interest
balance −= minimum payment
extra payment → priority debt (avalanche = highest APR, snowball = smallest balance)
when a debt's balance reaches $0, its minimum joins the extra pool from next month on
Worked example
Debt A: $2,000 balance, 20% APR, $50 minimum. Debt B: $5,000 balance, 15% APR, $100 minimum. $100 extra per month, avalanche strategy — Debt A has the higher APR, so it's the priority.
- Interest: Debt A = $2,000 × 20% ÷ 12 = $33.33. Debt B = $5,000 × 15% ÷ 12 = $62.50.
- Minimums paid: Debt A pays $50, Debt B pays $100.
- Debt A is the avalanche priority, so the $100 extra goes to it: its payment this month is $50 + $100 = $150. Debt B gets no extra this month.
- New balances: Debt A = $2,000 + $33.33 − $150 = $1,883.33. Debt B = $5,000 + $62.50 − $100 = $4,962.50.
That's month 1 — the loop repeats every month after this. Once Debt A is fully paid off, its $50 minimum joins the extra-payment pool starting the following month, growing what's available for Debt B until its balance reaches $0 too.
Common questions
What's the difference between avalanche and snowball?
Avalanche puts your extra payment toward the highest-interest-rate debt first, which minimizes total interest paid over time. Snowball puts it toward the smallest balance first, clearing individual debts faster for a psychological win, even if it costs slightly more in total interest.
What happens when I pay off one of my debts?
Its minimum payment doesn't just disappear — it rolls into your extra-payment pool from the next month on, so the amount going toward your next priority debt increases. This is what makes payoff accelerate as debts clear, in both strategies.
Which strategy should I actually use?
Avalanche is mathematically optimal — it minimizes total interest paid. Snowball can work better in practice if the early wins from clearing small debts keep you motivated to stick with the plan; the 'right' choice depends more on which one you'll actually follow through on.