How It Works
The snowball method prioritizes the smallest balance. When that debt is cleared, its payment capacity rolls into the next debt.
The calculator is an estimate rather than a lender payoff quote.
The calculator orders debts by balance from smallest to largest while keeping the payment assumptions you enter. After a balance is cleared, the payment previously assigned to it is rolled into the next debt.
The snowball method focuses on balance size rather than interest rate. That can produce a different payoff order and total interest result from an avalanche strategy.
Formula
- B — Balance
- r — Monthly interest rate
- P — Monthly debt budget
Example
Example inputs: Three debts of $1,500, $5,000, and $10,000 with a $700 monthly budget.
Result: The result estimates total months to clear the three balances using the snowball order.
Frequently Asked Questions
Does snowball always minimize interest?
No. It prioritizes the smallest balance, while other methods such as avalanche prioritize interest rate.
Does the snowball method always cost less interest?
No. Because it prioritizes the smallest balance rather than the highest rate, it can pay a higher-rate debt later. The total interest depends on the balances, rates, minimums, and extra payment.
What if two debts have the same balance?
The calculator uses the information you enter to establish the payoff order. In practice, borrowers may use interest rate or another consistent rule as a tie-breaker.
This calculator provides estimates for informational purposes only and should not be considered financial, tax, or legal advice.