How this calculator works
The snowball method ranks your debts by balance, not by rate, and sends every spare dollar to the smallest one. All minimums are still paid on time. When the smallest balance reaches zero, that account stops asking for money and its minimum joins the extra payment, so the next smallest debt receives a larger amount. The result is a plan that closes accounts early and often: the first win usually arrives long before an interest-first plan would produce one. That quicker feedback is the method's whole point, because staying with a repayment plan matters as much as the arithmetic. The cost is that a higher-rate balance may sit for months, so total interest is usually higher than the avalanche method. Interest is charged monthly at one twelfth of each annual rate, with no new borrowing, fees or promotional rates.
Formula
Each month: interest on debt d = balance_d × rate_d / 12; the minimum payment p_d reduces the balance. Pool = extra payment + any minimum freed by a cleared or nearly cleared balance. The pool pays the smallest outstanding balance, then the next smallest when that debt reaches zero. Repeat until every balance is zero. Total interest is the sum of monthly interest across all debts.
Worked example
Three debts of $2,000 at 4.9%, $6,000 at 19.99% and $15,000 at 7.5% carry $600 of minimum payments and $23,000 in total. Adding $100 a month under the snowball method clears the smallest loan in month 11, gives the $19.99% card its freed payment, and finishes the plan in 47 months with $4,824.96 of interest. The avalanche method takes the high-rate card first, finishes in 46 months and costs $4,235.25, so the quick win costs $589.71 in interest with this set of debts.
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Frequently asked questions
Why pay a low-rate debt first?
Because the goal is momentum, not pure arithmetic. A closed account is visible progress, and behavioural research and consumer counselling both note that people are more likely to keep going when they see results. The interest cost of that choice is shown in the totals.
When does snowball cost the most?
When your smallest balance also has the lowest rate and your highest rate sits on a large balance. In that case the avalanche method wins on both interest and time, and the only advantage left is the earlier first win.
Do the freed payments really roll over?
They do if you keep paying the same total each month. When an account closes, keep its minimum in your monthly budget and add it to the next target instead of spending it.
Should I include every debt?
Include any debt with a fixed minimum. A mortgage can be entered, but its large balance and mostly-interest payment can crowd out the consumer debts where the method actually helps.