The debt snowball method pays the required minimum on every debt and
directs all extra repayment money to the debt with the smallest balance.
When that debt reaches zero, its entire payment moves to the
next-smallest balance. A calculator estimates the order, payoff dates
and interest under stated balances, rates and payments.
Method / Methode
The calculator uses one fixed monthly debt budget: all starting minimums plus the extra amount. It accrues monthly interest, pays active minimums and directs the remainder to the smallest balance. Paid-off minimums stay in the debt budget.
De calculator gebruikt één vast schuldbudget: alle oorspronkelijke minima plus het extra bedrag. Na maandrente worden minima betaald en gaat de rest naar het kleinste saldo. Vrijgevallen minima blijven in het schuldbudget.
Issuer rules, daily interest, fees and rate changes can alter results. Keep contractual minimums current. / Dagelijkse rente, kosten en rentewijzigingen kunnen de uitkomst veranderen.
What information should you
enter?
List each debt’s name, current balance, annual interest rate and
required monthly payment. Add the total extra amount available every
month. Do not include a debt under dispute without first confirming it
belongs to you, and do not estimate the rate when a current statement is
available.
The method assumes minimum payments stay current on every account.
Late fees, penalty rates and collection action can overwhelm the planned
benefit if one debt is ignored while another receives extra money.
How does the snowball work?
Sort balances from smallest to largest. Pay every minimum. Send the
entire extra amount to the first debt. After it is cleared, redirect its
former minimum and the original extra amount to debt two. Continue until
all listed balances are zero.
For example, suppose three debts have balances of $600, $2,400 and
$7,000 with minimum payments of $40, $80 and $180. An extra $150 goes to
the $600 balance, so it receives $190. Once paid, $190 rolls to the
second debt, which then receives $270. When debt two is cleared, $270
rolls into the $180 payment on debt three.
The precise schedule changes with interest, statement timing and each
creditor’s minimum-payment rules. The included calculator uses fixed
monthly inputs and does not predict future minimum changes.
Snowball or debt avalanche?
The debt avalanche targets the highest interest rate first while
paying all other minimums. With the same payments and no fees, the
avalanche generally minimizes interest. The snowball prioritizes an
early completed account, which some borrowers find easier to
sustain.
Compare both using the same debts and monthly amount. The
lower-interest plan is not useful if it is abandoned, but motivation is
not a reason to ignore a very expensive or legally urgent debt. Past-due
housing, utilities, taxes, secured loans and court obligations may need
priority outside either simple ordering rule.
What does the calculator
assume?
It assumes interest accrues monthly from the entered annual rate,
payments arrive on time, no new purchases occur and the repayment budget
remains fixed. Credit-card interest often uses a daily balance method,
so the lender’s actual figures will differ slightly. Promotional rates
and deferred-interest offers require their own expiry dates and
terms.
The calculator is a planning model. Statements and contracts remain
the source for balances, rates, required payments and allocation.
What if minimum
payments are unaffordable?
Do not use the snowball chart to pretend the budget works. Contact
creditors early and explain what you can pay. The U.S. Federal Trade
Commission advises speaking with creditors before collection becomes
involved and requesting a manageable plan.
A reputable credit counselor can review the full situation. Ask about
fees, licensing, services and written terms. A debt management plan
differs from debt settlement; promises to erase debt quickly or requests
for large advance fees are warning signs.
Should you close
cards after paying them off?
Repayment and account closure are separate decisions. Closing can
affect available credit, fees and credit history, while leaving an
account open can create a route back into debt. Check annual fees,
spending controls and the reason the balance arose. Remove saved card
details or lock the card if continued use would undermine the plan.
How do you keep the plan
working?
Automate required payments where cash timing permits. Schedule the
extra payment just after income arrives. Keep a small emergency reserve
so a routine repair does not return to a card. Update the schedule after
a rate, balance or income change.
Mark each cleared debt and immediately redirect the complete payment.
Do not absorb it into ordinary spending without a deliberate
decision.
Reading the final result
Review total payoff time, estimated interest and the month each debt
ends. Compare the schedule with the avalanche option. Then test a
lower-extra-payment case to ensure the plan survives a normal difficult
month.
The debt snowball is an ordering system, not a promise. It works when
payments are affordable, minimums remain current, no new balances
replace old ones and the roll-forward happens every time an account
reaches zero.
