Debt Strategy Simulator

Debt Avalanche & Snowball Strategy Simulator

Understand Your Debt. Choose the Right Strategy. Get Out of Debt Faster.

If you’re struggling with multiple debts and unsure how to tackle them efficiently, our Debt Avalanche & Snowball Strategy Simulator is here to help. This free online tool lets you compare two popular debt repayment strategies — Avalanche and Snowball — and see which one suits your financial goals best.

How to Use the Debt Strategy Calculator?

Using the calculator is easy and requires only a few inputs:

• Click “Add Debt” and fill in details for each debt — including name, balance, interest rate, and minimum payment.
• Choose whether to apply any extra payments (one-time, monthly, or yearly).
• Select your preferred strategy: Avalanche or Snowball.
• As soon as you enter the details, you can view your debt repayment schedule, total interest paid, and a comparison between both strategies.

Key Features

• Compare Avalanche vs. Snowball strategies side by side
• Visualize your debt payoff timeline with charts and tables
• See the total interest paid and total principal repaid
• Understand which strategy saves more money or time
• Customizable extra payments to simulate real-life scenarios

What Is the Avalanche Strategy?

The Avalanche strategy focuses on paying off debts with the highest interest rate first while making minimum payments on others. This method saves more money in the long run because it minimizes interest accumulation.

What Is the Snowball Strategy?

The Snowball strategy prioritizes paying off debts with the smallest balance first, regardless of interest rate. As you pay off each debt, the momentum builds — hence the name “snowball.” This approach offers quick wins and psychological motivation.

Advantages of Using the Simulator

• Helps you make data-driven decisions about your repayment strategy
• Shows exactly how long it will take to become debt-free
• Highlights the cost savings with either method
• Eliminates guesswork and manual spreadsheet calculations

Limitations to Keep in Mind

• The calculator assumes minimum payments and fixed interest rates throughout the repayment period.
• Unexpected expenses, fluctuating incomes, or variable rates are not factored in.
• This is a simulation tool and not a substitute for professional financial advice.

Practical Example

Imagine you have three debts:

• Credit Card A: ₹1,20,000 at 18% interest with ₹6,000 minimum payment
• Personal Loan: ₹2,00,000 at 12% interest with ₹8,000 minimum payment
• Credit Card B: ₹80,000 at 24% interest with ₹4,000 minimum payment

By using this calculator, you’ll see that the Avalanche strategy helps you pay less interest over time, while the Snowball method may give you faster emotional wins by clearing debts quicker.

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Formula Used in the Calculator

The tool uses compound interest formulas on a monthly basis:

Monthly Interest = Balance × (Interest Rate ÷ 12 ÷ 100)

The calculator allocates your payments either to the highest-interest debt (Avalanche) or the smallest balance (Snowball), and applies any extra payments accordingly.

Key Terms to Know

• Principal: The original amount of debt you owe, not including interest
• Interest Rate: The percentage you are charged on your remaining debt
• Minimum Payment: The smallest amount you are required to pay monthly
• Extra Payment: Any amount paid above the required minimum, which helps reduce the debt faster

Frequently Asked Questions (FAQs)

1. Which strategy is better — Avalanche or Snowball?

Avalanche saves more money on interest, while Snowball offers psychological motivation. The best strategy depends on your financial behavior and goals.

2. Can I use this calculator for business debts?

Yes, as long as you have the necessary details like balance, interest rate, and payment terms, you can simulate both personal and business debts.

3. Will this tool store my data?

No, your data is not stored. This is a browser-based calculator and all calculations happen locally.

4. Why You Should Consider a Debt Repayment Strategy?

Paying off debt without a strategy can lead to wasted money on interest and delayed financial freedom. A structured approach like Avalanche or Snowball ensures your payments are optimized to either save money or build confidence, depending on what matters most to you.

Final Thoughts

Whether you choose Avalanche or Snowball, the key is to stay consistent. Use this simulator to understand your payoff journey and take control of your debt today.

Start now — becoming debt-free is just a few clicks away.