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Inventory the debts before choosing an order
Record balances, rates, minimums, due dates and fees. Include credit cards, personal loans and buy now pay later. Keep contractual payments up to date where possible. Rent, utilities, secured debts and legal obligations may have consequences that a rate-ranking exercise cannot capture.
Two orders, one payment budget
The avalanche directs spare repayments to the highest interest rate first. The snowball directs them to the smallest remaining balance first. Both keep minimum payments on the other debts and roll cleared payments forward. Compare the interest and repayment time under exactly the same total monthly budget; different budgets would not be a fair comparison.
Follow one month
A $5,000 balance at 20% has $83.33 of interest under this monthly approximation. A $150 minimum then leaves $4,933.33. If that debt receives another $200 it closes at $4,733.33. The next month starts from that lower balance. Actual statements may use daily interest and different minimum rules.
Know what the comparison misses
A 0% promotional rate may expire, a card minimum can change, and fees can alter the result. Reducing a balance and then borrowing it again changes the trajectory. The calculator assumes fixed rates and no new purchases. It compares arithmetic, not whether consolidation, refinancing or a particular product suits you.
If payments are becoming difficult
Contact the lender about hardship early and read Moneysmart’s financial counselling information below. Free financial counselling can help explain options. Do not rely on a long repayment projection if the monthly budget cannot cover essentials.
Try it, then question it
Change one input at a time. Explain why the result moved before changing another. Compare your answer with the worked example and read the exclusions before relying on any estimate.
Model boundaries
Three debts; enter zero balance for unused rows. Rows with zero opening balance contribute no minimum payment to the budget. Enter any additional cash in the extra-payment field. Interest is charged monthly at annual rate ÷ 12 before payments. Fixed dollar minimums and the full original monthly budget continue after a debt is cleared. Unused minimum payments roll into the selected priority. Ties use row order; snowball orders balances after interest and minimum payments. No fees, new borrowing, promotional-rate expiry, daily interest or changing minimums. Final payments are capped at the amount owed. Unpaid debt after 1,200 months is reported as not repaid.
References and verification
Official references checked for this release on 1 November 2026. Rules and product terms can change.