Debt Snowball Calculator
Plan your debt repayment using the Debt Snowball method by prioritizing smaller debts for quick wins and building momentum to become debt-free.
Introduction
Welcome to the Debt Snowball Calculator! This tool helps you create a repayment plan for multiple debts using the Debt Snowball method. By focusing on the smallest debt first while making minimum payments on others, you gain momentum as each debt is paid off, rolling the payments into the next smallest debt.
How to Use
- Select the currency for your calculation (e.g., USD, INR, EUR).
- Enter details for each debt, including name, balance, annual interest rate, and minimum monthly payment.
- Click "Add Another Debt" to include more debts if needed.
- Specify an extra monthly payment amount to apply to the smallest debt for faster repayment.
- Click "Calculate Snowball" to see your repayment plan based on the Debt Snowball method.
- Review the summary, notes, and chart in the result section for insights on your debt repayment timeline.
- Click "Copy Results" to copy the summary, "Reset" to clear the form, or "Save Entries" to store calculations locally.
Understanding Debt Snowball
The Debt Snowball method focuses on paying off the smallest debt first while making minimum payments on larger debts. Key points include:
- Debts are sorted by balance, smallest to largest, regardless of interest rate.
- Extra payments are applied to the smallest debt until it's paid off, then rolled over to the next smallest.
- Interest is calculated monthly for each debt based on its remaining balance.
- This method prioritizes psychological wins by clearing smaller debts quickly, building momentum.
Calculations assume fixed interest rates and consistent payments unless specified otherwise.
FAQs
What if I can pay more than the extra amount some months?
This calculator assumes a fixed extra payment. For variable payments, recalculate with updated amounts to see the impact on your timeline.
Does this account for changing interest rates?
No, interest rates are assumed to be fixed. If rates change, update the values and recalculate.
How does this differ from the Debt Avalanche method?
Debt Snowball focuses on smallest balances first for quick wins, while Debt Avalanche targets highest interest rates to minimize total interest paid.
Does the currency selection affect the calculation?
No, the currency selection is for display purposes only. The calculation remains the same regardless of the currency chosen.
About This Calculator
Built by xAI, this Debt Snowball Calculator provides a simple way to plan debt repayment for educational purposes. For detailed financial planning, consult a financial advisor.