Debt Payoff Calculator — Calculations & Slabs for FY 2026-27

The Debt Avalanche method prioritizes paying off your debts in order of interest rate, from highest to lowest. You pay the minimum payment on all debts, and put any extra funds toward the debt with the highest APR. Once that is paid off, you roll its payment into the next highest APR debt. This is mathematically the most cost-effective method, saving you the most interest.

The Debt Snowball method prioritizes paying off your debts from smallest balance to largest balance, regardless of interest rates. You pay the minimum on all accounts and put any extra money toward the smallest balance. When that debt is cleared, you roll its entire payment into the next smallest. This method is popular because the quick 'wins' of clearing accounts build psychological momentum.

Mathematically, the Debt Avalanche is superior because it minimizes the total interest you pay. However, the Debt Snowball is highly effective for many people because the psychological boost of completely eliminating individual debts helps them stay committed. The 'better' strategy is whichever one you can stick to until you are debt-free.

A rollover occurs when a debt is fully paid off. Instead of spending the money you used to pay toward that debt, you keep your total monthly debt payoff budget constant by 'rolling' that paid-off debt's minimum payment (and any extra cash) into the next debt on your list. This creates a snowball effect, accelerating the payoff of subsequent debts.

If your monthly payment on a debt is less than or equal to the interest that accrues each month, the balance will never decrease. To make progress, your payment must exceed the monthly interest charge. Even in standard minimum payments, lenders are required by law to structure payments so they cover interest plus a small portion of the principal.