Debt Snowball Calculator

How to Use the Debt Snowball Calculator

This Debt Snowball Calculator helps you to plan an effective debt repayment strategy using either the snowball or avalanche method. Follow these steps to input your data and review your results:

Step 1: Enter Your Total Monthly Payment

Begin by inputting the total amount you are able to allocate towards debt repayment each month. This information goes into the field labeled “Total Monthly Payment Available”. Enter an amount that is at least 1.

Step 2: Specify the Number of Debts

Next, fill in the field labeled “Number of Debts”. Indicate the total count of different debts you need to manage, ensuring it is between 1 and 10.

Step 3: Input Individual Debt Details

• For each debt, start with the “Debt 1 Balance” field where you will input the outstanding balance of your first debt. This has to be a number greater than or equal to 1.
• Enter the “Debt 1 Interest Rate (%)”, which is the annual interest rate applied to that debt. The value must be between 0% and 100%.
• Provide the “Debt 1 Minimum Payment”, indicating the least amount you can pay monthly. This value should also be 1 or more.

Repeat similar steps for additional debts you have, by increasing the debt number (i.e., Debt 2, Debt 3, etc.) based on your initial entry in the number of debts field.

Step 4: Choose Your Payment Strategy

Opt between two payment strategies available under “Payment Strategy”:

• Smallest Balance First (Snowball): Pay off the debt with the smallest balance as a priority.
• Highest Interest First (Avalanche): Pay off the debt with the highest interest rate first.

Choose the strategy that aligns best with your financial goals and motivation.

Step 5: Review the Results

• Total Debt Amount: Shows the cumulative amount of all debts inputted, formatted in USD.
• Months Until Debt Free: Calculates the number of months required to become debt-free.
• Total Interest Paid: Displays the total interest amount you will have paid by the end of the debt re-payment period.
• Debt Free Date: Gives the projected date when all debts will be paid off, based on the provided inputs.
• Total Amount Paid: This is the total of your debt and interest paid, showing the overall expenditure over the repayment period.

Use these results to understand the trajectory of your repayment plan and make informed budgeting decisions for successful debt management.