Data Source & Methodology
AuthoritativeDataSource: Consumer Financial Protection Bureau (CFPB), “What is the debt snowball method?”, and educational guidance on credit card interest calculations. Also see Federal Reserve’s consumer credit statistical notes for context on revolving credit behavior.
Tutti i calcoli si basano rigorosamente sulle formule e sui dati forniti da questa fonte.
Formula Explained
Monthly rate: \( r_{m,i} = \frac{r_i}{12} \).
Monthly interest: \( I_i(t) = B_i(t)\cdot r_{m,i} \).
Payment allocation (per month \( t \)):
1) Pay all minimums: \( P_{\text{mins}}(t) = \sum_i m_i \).
2) Extra budget: \( X(t) = \max\{0, \text{Budget} + \mathbf{1}_{t=1}\cdot \text{OneTimeExtra} - P_{\text{mins}}(t)\} \).
3) Apply \( X(t) \) to the current target debt (Snowball: smallest \( B \); Avalanche: highest \( r \); Custom: user order).
Balance update: \( B_i(t+1) = \max\{0,\, B_i(t) + I_i(t) - P_i(t)\} \).
When \( B_k(t) \to 0 \), its minimum \( m_k \) rolls over to the next target.
Glossary of Variables
- Balance: Current principal you owe on a debt.
- APR: Annual Percentage Rate; interest per year.
- Minimum Payment: Required monthly payment to keep the account in good standing.
- Monthly Budget: Total amount you can allocate across all debts each month.
- Snowball: Order by smallest balance first.
- Avalanche: Order by highest APR first.
- Custom: Manual order you define.
How It Works: A Step-by-Step Example
Inputs: Budget $800/month; Debts — Card A: $1,500 @ 19.99% min $40; Card B: $4,200 @ 23.9% min $85; Loan C: $2,700 @ 8.5% min $60. Strategy: Snowball.
- Pay minimums ($185 total). You have $615 extra this month.
- Apply $615 to the smallest balance (Card A). Balances update after interest.
- Once Card A is paid off, its $40 minimum rolls to Card C, increasing attack power.
- The “snowball” grows, accelerating payoff until all debts hit zero.
The calculator reproduces this month by month, accounting for monthly interest and rolling minimums.
Frequently Asked Questions
Should I include installment loans or only credit cards?
You can include any debt with a balance, APR, and minimum payment. For low-APR installment loans, Avalanche may reduce more interest.
What if my budget is less than the sum of minimums?
The calculator will warn you. You must at least cover minimums to avoid delinquency and extra fees.
Can I switch strategies later?
Yes. Change the dropdown and recalculate. Compare payoff date and interest saved.
Does order update every month?
Yes. Snowball and Avalanche re-evaluate the “current target” as balances change; Custom preserves your manual order.
How precise are dates?
We assume monthly compounding and payments at regular monthly intervals. Real-world statements may differ slightly by issuer.
Tool developed by Ugo Candido. Finance content verified by the CalcDomain Editorial Board.
Last accuracy review: