How the debt eliminator works
This debt eliminator simulates your debts one month at a time. Each month it adds interest to every balance, makes the minimum payment on each debt, and then sends every remaining dollar of your budget to one target debt. When that target is paid off, its payment "rolls over" onto the next debt — the snowball effect — so your payments accelerate as you go. Your total monthly payment stays the same the whole time; only where the money goes changes.
You choose the target order. The debt avalanche always attacks the debt with the highest interest rate first, which removes the most expensive interest and minimizes what you pay overall. The debt snowball attacks the smallest balance first, clearing whole accounts quickly so you feel progress and stay motivated. This tool calculates both and tells you the exact dollar and time difference between them.
A worked example
Imagine three debts and an extra $100 per month:
| Debt | Balance | APR | Min. payment |
|---|---|---|---|
| Store card | $1,200 | 26.99% | $35 |
| Visa | $4,800 | 21.99% | $120 |
| Personal loan | $7,500 | 12.50% | $180 |
With minimums alone, debts like these can take many years to clear and rack up thousands in interest. Adding $100 a month and following the avalanche order clears them years sooner and saves a large chunk of interest. The snowball order knocks out the $1,200 store card first for an early win, then rolls that $35 — plus your $100 — onto the Visa. Type your own numbers above to see your personal figures.
What affects your debt-free date
- Interest rate (APR). Higher rates mean more of each payment goes to interest, slowing you down. This is why the avalanche targets them first.
- Extra payment. Any amount above the minimums goes straight to principal and compounds in your favor. This is the single biggest lever you control.
- Minimum payments. Paying only the minimum — especially on credit cards, where minimums shrink as the balance falls — stretches payoff out the longest.
- New spending. Adding new charges to a card you’re paying down resets your progress. The plan assumes you stop adding to these balances.
How to use this with the other tools
If you only want to focus on cards, the credit card payoff planner drills into a single card. If you’re weighing a reduced-interest plan through a credit counseling agency, the debt management plan calculator estimates that path. And to decide which method fits you, read debt snowball vs. avalanche.