Debt Payoff Calculator
avalanche vs snowball

How to pay off debt faster — and spend less on interest

Debt left unchecked compounds against you in exactly the same way that savings compound for you. This calculator shows your true payoff timeline, total interest cost, and the dramatic difference that even small extra payments make — so you can make an informed decision about how aggressively to tackle your debt.

The calculation uses the same amortisation logic as a mortgage: each monthly payment covers that month's interest first, with the remainder reducing the principal. Because credit card and personal loan interest rates tend to be far higher than mortgage rates, the interest portion of early payments is proportionally much larger — meaning it takes a long time for your balance to drop meaningfully on minimum payments alone.

Avalanche vs snowball — which method wins?

The avalanche method directs extra payments to your highest interest rate debt first, regardless of balance size. Mathematically, this minimises total interest paid and clears debt fastest. The snowball method targets the smallest balance first, giving you quicker wins that maintain motivation. Research suggests the snowball method leads to better real-world outcomes for many people precisely because motivation matters — but if you're comfortable staying the course, avalanche is the financially optimal choice.

The power of overpaying

Even £50 per month extra on a £5,000 credit card at 22% APR can cut the repayment period by years and save hundreds of pounds in interest. Use the extra payment slider to model this for your own situation. The relationship isn't linear — the earlier and more consistently you overpay, the disproportionately larger the saving.

Balance transfers and consolidation

This calculator also helps you evaluate whether a balance transfer or debt consolidation loan makes sense. Enter your current balance and the new (lower) rate, then compare the total interest paid. Factor in any transfer fees — typically 2–3% of the balance — to see if the deal genuinely saves money over your intended repayment period.

Once you're debt-free, redirecting the same monthly amount into savings or investments compounds in your favour instead — making clearing expensive debt one of the best guaranteed returns available.