Debt Snowball Calculator Formula
Understand the math behind the debt snowball calculator. Each variable explained with a worked example.
Formulas Used
Months to Pay Off
months_to_payoff = monthly_rate > 0 ? (monthly_payment > total_debt * monthly_rate ? ceil(-log(1 - total_debt * monthly_rate / monthly_payment) / log(1 + monthly_rate)) : 999) : ceil(total_debt / monthly_payment)Total Interest Paid
total_interest = monthly_rate > 0 ? (monthly_payment > total_debt * monthly_rate ? monthly_payment * ceil(-log(1 - total_debt * monthly_rate / monthly_payment) / log(1 + monthly_rate)) - total_debt : total_debt * 10) : 0First Debt Paid Off (Approx)
first_win_months = monthly_rate > 0 ? round(ceil(-log(1 - total_debt * monthly_rate / monthly_payment) / log(1 + monthly_rate)) / num_debts * 0.3) : round(total_debt / monthly_payment / num_debts * 0.3)Variables
| Variable | Description | Default |
|---|---|---|
total_debt | Total Debt Balance(USD) | 30000 |
avg_rate | Weighted Average Interest Rate(%) | 15 |
monthly_payment | Total Monthly Payment(USD) | 800 |
num_debts | Number of Separate Debts | 5 |
monthly_rate | Derived value= avg_rate / 12 / 100 | calculated |
How It Works
Debt Snowball Method
Popularized by Dave Ramsey, the snowball method pays off debts from smallest balance to largest.
How It Works
1. List debts from smallest to largest balance 2. Make minimum payments on everything 3. Throw all extra money at the smallest debt 4. When the smallest is gone, roll that payment into the next 5. The payment amount "snowballs" as each debt is eliminated
Why It Works Psychologically
Quick wins provide motivation. Seeing debts disappear early keeps you committed to the plan.
Worked Example
$30,000 total debt across 5 accounts at 15% average, paying $800/month.
- 01Monthly rate = 15% / 12 = 1.25%
- 02Months to payoff = -ln(1 - $30,000 x 0.0125 / $800) / ln(1.0125) = 49 months
- 03Total paid = $800 x 49 = $39,200
- 04Total interest = $39,200 - $30,000 = $9,200
- 05First small debt paid off in approximately 3 months
Frequently Asked Questions
Does the snowball method cost more than the avalanche?
Usually yes, because you may leave higher-rate debts untouched longer. The extra interest cost is typically a few hundred to a few thousand dollars, depending on your debts. Many people consider this a worthwhile price for the motivation boost.
Can I combine snowball and avalanche?
Yes. Some people use a hybrid: start with the snowball to get quick wins, then switch to the avalanche once they have momentum. Or group debts with similar rates and tackle the smallest first within those groups.
What about debts with the same balance?
When two debts have similar balances, pay off the one with the higher interest rate first. This combines the psychological benefit of the snowball with the mathematical advantage of the avalanche.
Learn More
Guide
Guide to Debt Snowball vs. Debt Avalanche
Compare the debt snowball and debt avalanche methods for paying off debt. Learn how each strategy works, which saves more money, and which is better for your situation.
Ready to run the numbers?
Open Debt Snowball Calculator