How the two methods work
Both plans use the sum of your listed minimum payments plus your extra monthly amount as one fixed budget. Each month, the calculator adds interest, pays the minimums on active debts, then sends the remaining budget to a priority debt. When one debt is paid off, its former minimum remains in the budget and goes toward the other debts.
Worked example
With the sample entries—$5,000 at 24% with a $150 minimum, $3,000 at 18% with a $90 minimum, and $8,000 at 7% with a $120 minimum—an extra $200 makes the monthly debt budget $560. Change any entry above to see both methods recalculate. Under this model, avalanche takes 34 months with $2,871.66 in interest; snowball takes 35 months with $3,079.80 in interest. The example is illustrative, not a recommended payment.
Assumptions and limits
Interest each month equals the opening balance times the entered annual rate divided by 1,200, rounded to cents. Payments are rounded to cents and capped at the balance due. The strategies are compared over at most 600 months. Rates, minimums, and the total monthly budget remain fixed. No new purchases, fees, promotional rates, late payments, or daily interest are modeled. Real lender allocation and compounding rules may differ. Check the downloadable schedule against your statements before making a financial decision.