Debt payoff calculator
Add your credit cards, overdraft, loans and car finance to see when you could be debt-free, how much interest you’d pay, and how the avalanche and snowball methods compare with paying only the minimums.
Your figures, with FCA rules on APRChecked Free, no sign-up
Example figures
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Debt-free in
2 years, 8 months
Avalanche, paying £565 a month. Paying only the minimums, it takes 4 years, 3 months.
- Total interest
- £2,456
- Saved against minimums only
- £1,934
- Paid each month
- £565
- Snowball instead
- £2,715
£17,756 paid in all
Minimums only: £4,390 of interest over 4 years, 3 months
£415 of minimums plus £150 extra
2 years, 8 months, £259 more interest
- Avalanche
- Snowball
- Minimums only
Avalanche clears everything in 2 years, 8 months
Plan | Debt-free in | Interest | Total paid |
|---|---|---|---|
| Avalanche | 2 years, 8 months | £2,456 | £17,756 |
| Snowball | 2 years, 8 months | £2,715 | £18,015 |
| Minimums only | 4 years, 3 months | £4,390 | £19,690 |
Debt | Balance | APR | Cleared in |
|---|---|---|---|
| Credit card | £4,500 | 22.9% | 1 year, 7 months |
| Personal loan | £1,800 | 7.9% | 2 years, 8 months |
| Car finance | £9,000 | 9.9% | 2 years, 8 months |
An illustration, not a forecast. Rates and monthly payments stay as entered, with no new borrowing, fees or missed payments. The monthly rate is (1 + APR) to the power 1/12, minus 1.
Card minimums usually fall as the balance falls. Following them down takes longer and costs more than minimums only shows here, which keeps each payment at today’s amount.
Add these debts to Aureli and update the balances as they fall, next to everything you own.
Track your debtsHow this works
The calculator runs three plans side by side, month by month. Minimums only pays each debt its own minimum and nothing more. The avalanche and snowball both pay every minimum plus your extra amount, and keep paying that same total each month until everything is cleared: when one debt is paid off, the money that went to it rolls onto the next.
The two differ only in where the extra goes first. The avalanche puts it on the debt with the highest APR. The snowball puts it on the smallest balance. A tie goes to the other rule, then to the order the debts are entered in.
Each month, interest is added to every balance and then the payments come off. A UK APR is an annual rate that already counts compounding, so the monthly rate is (1 + APR)1/12 − 1 rather than APR ÷ 12: 22.9% APR works out at 1.73% a month, not 1.91%.
The worked example has £4,500 on a credit card at 22.9%, £1,800 left on a personal loan at 7.9% and £9,000 of car finance at 9.9%, with £150 a month on top of £415 of minimums. The avalanche clears everything in 2 years, 8 months with £2,456 of interest, the snowball in 2 years, 8 months with £2,715, and minimums alone take 4 years, 3 months and £4,390.
Assumptions
- Rates stay as entered for the whole time. The end of a 0% or promotional period, a variable rate moving and penalty rates aren’t modelled.
- Each minimum is a fixed amount. A card’s minimum is usually worked out from the balance, so it falls as the balance falls; paying only that falling minimum takes longer and costs more than shown here.
- No new borrowing, fees or charges, and every payment is made in full and on time.
- Personal loans and car finance have a set monthly payment: enter it as the minimum. Paying a loan off early can carry a charge on some agreements, which isn’t included.
- A plan still running after 50 years is shown as not cleared.
Avalanche or snowball
The avalanche
Extra money goes to the debt charging the highest APR. That keeps the interest charged as low as any order can, so the avalanche costs the same as the snowball or less. In the worked example it clears the 22.9% credit card first, in 1 year, 7 months.
The snowball
Extra money goes to the smallest balance, whatever its rate. A whole debt disappears sooner and the number of payments to keep track of falls faster. In the worked example it clears the £1,800 personal loan in 9 months, and costs £259 more in interest than the avalanche.
When the smallest debt also has the highest rate, the two orders are the same. When they differ, the gap is often small next to the gap between either plan and minimums only: here, £1,934 of interest with the avalanche. The calculator shows both so the trade-off is in pounds.
Why minimums take so long
FCA rules set a floor under a credit or store card’s minimum payment: at least the month’s interest, fees and charges plus 1% of the balance. Lenders often ask for a little more, but on a high-rate card much of a minimum payment can still go on interest.
Because the minimum is worked out from the balance, it shrinks as the balance does, and the last few hundred pounds can take years to clear. Keeping the payment at today’s amount, as this calculator does, clears a card much faster than following the minimum down.
If over 18 months you’ve paid more in interest, fees and charges than off the balance, your card provider must contact you about paying more. If you’re still in that position after 36 months, it must offer a way to repay in a reasonable time, and if you can’t afford that it may reduce, waive or cancel interest and charges.
If repayments are hard to keep up
This calculator treats every debt the same way. Debt advisers separate priority debts, such as rent or mortgage, council tax, energy bills and court fines, where missing payments can lead to losing your home, your supply or a court order, from cards, overdrafts and loans.
Free, confidential debt advice is available from MoneyHelper, which is backed by the government, and from debt charities including StepChange and National Debtline. Debt advice doesn’t need to cost anything.
In England and Wales, a debt adviser can apply for Breathing Space, which pauses most interest, charges and enforcement on your debts for up to 60 days while you get advice. Scotland has its own scheme.
Questions
Is the debt avalanche or snowball method better?
The avalanche, highest APR first, always pays the same interest as the snowball or less. The snowball, smallest balance first, clears individual debts sooner. In the worked example the avalanche costs £259 less in interest and both are debt-free in 2 years, 8 months. Which matters more depends on you; the calculator shows the cost of each for your own debts.
How long does it take to pay off a credit card with minimum payments?
Often many years. A card’s minimum must cover at least the month’s interest, fees and charges plus 1% of the balance, so on a high-rate card little of each payment reduces what you owe, and because the minimum falls with the balance, the end keeps moving away. Fixing the payment at today’s minimum, as this calculator does, shortens it a lot.
How is the monthly interest worked out from the APR?
A UK APR is an annual equivalent rate that already includes compounding, so the matching monthly rate is its twelfth root: (1 + APR) to the power 1/12, minus 1. At 22.9% APR that is 1.73% a month, a little less than 1.91%, the APR divided by 12. Card providers often charge interest daily, so a statement can differ slightly.
What about a 0% balance transfer or 0% purchase card?
Enter the debt at 0% to see the plan while the offer lasts, but this calculator holds rates fixed, so it won’t show the rate rising when the offer ends. Transfers usually carry a fee added to the balance, and the offer can end early if a payment is missed. Entering the rate that applies afterwards shows the other end of the range.
How do I add an overdraft?
An overdraft has no minimum payment, so enter what you plan to pay off it each month. At £0 it never clears on minimums alone; with an extra amount, the avalanche or snowball reaches it in turn. Arranged overdrafts are quoted as a single yearly interest rate, which you can enter as the APR.
Does paying off debt increase my net worth?
Paying off debt from savings leaves your net worth where it was on the day: you own less and owe the same amount less. Paying it from income raises it, and every month of interest you no longer pay adds to it. In the worked example, the avalanche instead of minimums only keeps £1,934 of interest in your pocket.
Watch your debts fall in Aureli.
Add your cards, loans and car finance next to your savings, pension and home, update the balances as you pay them down, and see your net worth rise as they fall.
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