Debt Snowball Calculator
Enter up to 8 debts. The snowball method pays the smallest balance first, then rolls that freed payment onto the next — building momentum until you're debt-free. See your exact payoff order and debt-free date.
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How the Debt Snowball Method Works
The debt snowball method, popularized by personal finance experts like Dave Ramsey, is a debt-reduction strategy designed to build psychological momentum. Instead of focusing on interest rates, you focus on account balances.
Here is how it works:
- Step 1: List all of your debts from smallest balance to largest balance, regardless of interest rate.
- Step 2: Continue making the minimum payments on all of your debts to keep them current.
- Step 3: Put any extra money you can find in your budget toward the smallest debt.
- Step 4: Once the smallest debt is paid off, take the money you were paying on it (the minimum payment plus any extra money) and "roll" it onto the next smallest debt.
Debt Snowball vs. Debt Avalanche: The debt avalanche method mathematically saves more money by paying off the highest interest rate debts first. However, many people struggle to stay motivated with the avalanche method if their highest interest debt also happens to be their largest balance. The debt snowball method prioritizes quick psychological wins. By crossing smaller debts off your list quickly, you build the motivation needed to stick with the plan until you are completely debt-free. Research has shown that the snowball method often has higher overall success rates for individuals trying to get out of debt.
Frequently Asked Questions
What is the debt snowball method?
The debt snowball method is a debt-reduction strategy where you pay off debts in order of smallest balance to largest balance, gaining psychological momentum as you eliminate individual accounts.
Debt snowball vs. debt avalanche — which is better?
The debt avalanche method (paying highest interest rate first) is mathematically optimal and saves more money in interest. However, research shows the debt snowball method has higher success rates because the quick wins keep people motivated.
Should I include my mortgage in the debt snowball?
Generally, no. Mortgages are usually your largest debt and have relatively low interest rates. The debt snowball is best for consumer debt like credit cards, personal loans, car loans, and student loans.
How much faster do extra payments make me debt-free?
Even a small extra payment of $50 or $100 per month can shave months or years off your debt-free date by attacking the principal balance faster.
Ledgerly calculators use standard financial formulas — the same math financial professionals use. We're developers, not financial advisors. Results are estimates. See our methodology →