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Debt Snowball Calculator

383 words Calculator
NameBalance ($)Interest Rate (%)Min Payment ($)Actions

Repayment Schedule

Enter your debts and click "Calculate Snowball" to see the plan.

Simplify debt repayment with our Debt Snowball Calculator. Organize debts, pay them off faster, track progress visually, and build financial freedom step by step.

Debt Snowball Calculator Documentation

What is it?

The Debt Snowball Calculator is a financial tool designed to help you systematically pay off your debts. Using the “Snowball Method,” it organizes your debts from smallest to largest and helps you focus payments on one debt at a time while making minimum payments on others. This approach not only simplifies debt repayment but also provides quick motivational wins as debts are eliminated step by step.

Formula

The Debt Snowball Method uses this simple process:

  1. Order debts from smallest to largest balance (ignore interest rate for now).
  2. Pay the minimum payment on all debts except the smallest.
  3. Use any extra money to make larger payments toward the smallest debt.
  4. Once the smallest debt is paid off, snowball the freed-up payment toward the next smallest debt.
  5. Repeat until all debts are eliminated.

How to Use

  1. Input Debt Details: Add your debts by entering the name, balance, interest rate, and minimum payment.
  2. Calculate: Click the “Calculate Snowball” button to generate a repayment schedule.
  3. View Results: Review the repayment timeline, months needed to pay off each debt, total interest paid, and a Chart.js graph illustrating the journey.
  4. Adjust Strategy: Fine-tune debt details or extra payments to optimize the repayment process.

FAQs

1. Does the calculator consider interest rates?
Yes, it calculates interest month-by-month while prioritizing the smallest balance for faster wins.

2. What happens when a debt is paid off?
The freed-up payment for that debt adds to the payment for the next debt in line.

3. Is this method better than the debt avalanche method?
The debt snowball method focuses on motivation while the avalanche method prioritizes saving money on interest. Choose the one best suited to your personality.

4. Can I make extra payments?
Yes, simply input your additional funds after minimum payments are accounted for, and the calculator will distribute them to the smallest debt.

Key Terms

Debt Snowball: A repayment strategy focused on paying off the smallest debts first to gain momentum.

Minimum Payment: The least amount you must pay each month to avoid penalties on your debt.

Principal: The original amount you borrowed (without interest).

Interest: The cost of borrowing money, usually expressed as a percentage of the balance.

Repayment Schedule: A detailed plan that shows how much you’ll pay monthly and when each debt will be fully paid off.

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