How to calculate a debt payoff plan
Two strategies dominate: avalanche pays the highest interest rate first and costs the least, while snowball clears the smallest balance first and builds momentum. Both send every spare pound to one target while paying minimums on the rest.
The rule
Payoff time = months until each balance reaches zero at (minimum payments + one extra payment rolled onto the focus debt)
Do it automatically — Debt payoff (snowball / avalanche)Step by step
- 1List every debt with its balance, interest rate and minimum payment.
- 2Choose avalanche (highest rate first) or snowball (smallest balance first).
- 3Pay minimums everywhere and put all spare cash on the focus debt.
- 4When one clears, roll its whole payment onto the next — this is what accelerates the plan.
What trips people up
- • Avalanche is mathematically cheaper; snowball is behaviourally more likely to be finished.
- • A 0% balance transfer can beat both, provided you clear it before the promotional period ends.
Common questions
Should I save or repay debt first?
Build a small emergency buffer, then attack anything costing more than your savings rate.
Does paying off debt help my credit score?
Yes — lowering utilisation and clearing accounts both help over time.
Skip the maths
See how long it takes to clear multiple debts using snowball or avalanche.
Open the get out of debt faster tool