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How this works
You list your debts with their balances, APRs and minimum payments, and add any extra you can pay each month. Each month interest is added to every debt, every minimum is paid, and whatever’s left of your budget goes to the debt you’re targeting. When one is cleared, its payment rolls on to the next.
The avalanche method targets the highest APR first, which always costs least in interest. The snowball method targets the smallest balance first, which clears whole debts sooner. The calculator runs both so you can compare.
What it assumes
- Your total monthly payment stays the same until everything is paid.
- No new borrowing, fees or rate changes.
- UK APRs are true yearly rates, turned into a monthly rate.
Worked example
A card, a loan and a store card
- You owe £3,000 on a card at 24.9%, £8,000 on a loan at 6.9% and £600 on a store card at 19.9%. The minimums add up to £365, and you add £200, so you pay £565 a month.
- With avalanche you clear the card first, then the store card, then the loan. You’re debt-free in 1 year 11 months, paying £1,105.47 in interest.
- With snowball the store card goes in month 3. You’re still debt-free in 1 year 11 months, paying £1,126.72, just £21.24 more.
- Paying only the minimums would take 3 years 3 months and cost £2,537.64 in interest, so the extra £200 saves £1,432.17.
Worked out with the same maths as the calculator above.
What to do next
Common questions
Avalanche or snowball: which should I choose?
Avalanche saves the most money. Snowball gives quicker wins, which helps some people keep going. If the difference is small, as in the example, pick the one you’re more likely to stick with.
Is the extra payment worth it if it’s small?
Usually, yes. Every extra pound goes straight to the balance of your most expensive or smallest debt, and the saving builds as each debt is cleared and its payment rolls on.
Should I keep paying minimums on everything?
Yes. Missing a minimum can mean fees, a higher rate and a mark on your credit file. The extra goes on top of the minimums, never instead of them.
Where can I get free help with debt?
If repayments feel unmanageable, speak to a free debt adviser before things get worse. GOV.UK points to MoneyHelper for free, impartial debt advice services.