Debt Repayment Simulator

Find the fastest way to get rid of your debts. Compare the Avalanche Method (which targets the debt with the highest interest rate first) with the Snowball Effect Method (which focuses on paying off the smallest debt balance first to motivate progress). Simulate the power of injecting an extra monthly contribution.

Quick presets:

Light Debts (Consumer) Critical Scenario (High Interest)

Extra Monthly Contribution (For Repayment)

The monthly amount you will save extra to inject into rapid debt repayment.

Debt Name	Outstanding Balance ($)	Interest Rate (% per month)	Minimum Installment ($)	Action

Avalanche Method (Highest Interest Rate)

Repayment Period

0 months

Total Interest Paid

$ 0.00

Focuses on eliminating the debt with the highest interest rate first, reducing the overall financial cost.

Snowball Effect Method (Smallest Balance)

Repayment Period

0 months

Total Interest Paid

$ 0.00

Focuses on paying off the smallest debt balance first, providing quick psychological victories and freeing up minimum payments.

Evolution of Consolidated Outstanding Balance

Comparative Schedule and Interest Savings

Compared Strategy	Months to Repay All	Debts Repaid Quickly	Total Interest Paid	Cost Difference

Understanding the Differences: Avalanche vs. Snowball Effect

When deciding to accelerate debt repayment (such as credit cards, overdrafts, or loans), two well-established personal finance methodologies compete for the best strategy. Both require paying all minimum payments, allocating any extra money to a specific debt:

1. The Avalanche Method (Mathematically Superior)

In the Avalanche Method, you order your debts in descending order of interest rate (from highest to lowest). All extra money (extra monthly contribution + freed minimum payments) is channeled to repay the debt with the highest interest rate.

Advantage: It is the rational approach that saves the most money in interest and compound rates.
Disadvantage: If your debt with the highest interest rate has a very high outstanding balance, you will take months to see the first debt paid off, which can wear down your discipline.

2. The Snowball Effect Method (Emotionally Superior)

In the Snowball Effect Method, debts are ordered by outstanding balance (from smallest to largest). Extra money is allocated to eliminate the smallest debt first.

Advantage: Offers quick psychological victories and frequent motivation by "crossing off" smaller creditors from the list. Additionally, it quickly eliminates fees and minimum payments from these small accounts, freeing up more monthly cash flow.
Disadvantage: It is mathematically more expensive, as you keep debts with high interest rates active for longer if their balances are larger.

Frequently Asked Questions

Yes! This is known as debt portability. In the US, if you have debts on your credit card (interest rate of ~14% per month) or overdraft (~8% per month), it's worth researching the option of taking out a personal loan with a lower interest rate (~6% per month) to pay off your expensive debts and save thousands of dollars.

The debt relief law protects citizens who cannot pay their debts without compromising their basic living expenses (housing and food costs). It prohibits commercial harassment in debt collection and allows debtors to convene their creditors for a global renegotiation under judicial supervision, with repayment plans of up to 5 years.

If you are guided purely by mathematical logic and want to pay the minimum possible amount of interest, choose the Avalanche Method. If you feel demotivated and need quick victories to keep your plan on track, choose the Snowball Effect Method.