Debt Snowball Calculator + The Debt Snowball Method Simplified

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Debt Snowball Method Definition

The debt snowball method involves paying off your smallest debt balances, then rolling those payments into your next largest balance, making larger and larger payments until your debt is paid off.

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You can’t have a snowball fight without snowballs. The best snowballs grow larger as you roll them with more and more snow until they pack enough punch to take down your target.

Just like in a snowball fight, using the debt snowball method can make savings goals more manageable and help you eliminate your debt. Debt snowballing involves paying off your smaller debt balances first, then directing those payments toward your larger balances once you pay off smaller ones. In this way, your debt payments pile up like a snowball that gets bigger and bigger until it smashes your debt.

Use the debt snowball calculator below to get ready for the snowball fight of your life and see when you could pay off your debt using this method.

Debt Snowball Calculator

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How to Use the Debt Snowball Calculator

The debt snowball method helps you chip away at your debt in larger and larger increments until the day you’re debt-free. Here’s what you’ll need to know:

  • Debt type: Select the type of debt you want to pay off before entering any further details.
  • Interest rate: Input the annual percentage rate (APR) for your loan.
  • Balance: Input the balance remaining on your loan, or the amount you still need to pay off.
  • Minimum payment: Input the minimum required payment on your loan balance. If you regularly pay more than the minimum, you can enter that payment amount here instead of the minimum.
  • Add more debt: To calculate your debt snowball payoff timeline, enter all debts that you’re currently responsible for paying. Add more debt with this button.

Raising your minimum payment amount will increase your snowball and help you repay your loans quicker.

The Debt Snowball Method Explained

An illustration of a snowball descending down a hill supports a debt snowball method definition as part of a debt snowball calculator.. Including text: What Is a Debt Snowball? The debt snowball method is all about momentum. O Pay off your smallest loans first with any extra money O Roll their payments toward your next smallest loans © Increase the size of your payment with each paid-off balance.

The debt snowball method takes its name from a snowball rolling down a hill, gathering more and more snow as it gets near the bottom.

When you begin to make payments toward your debt snowball, you’ll start with the minimum payments on all your bills until your smallest balance is paid off. If you can make an additional payment over the minimum amount using this method, you would put it toward your smallest balance first.

When you pay off that debt, move to the next smallest balance by rolling your minimum payment from the paid-off account into the next snowball target. As you pay down debts, the payments grow larger and larger until the snowball knocks out your biggest balances.

Debt Snowball Method Example

Let’s look at a simple example of using the debt snowball method to pay off the following four debt balances:

  • Credit card debt: $4,500 / $75 payment
  • Car loan: $15,000 / $250 payment
  • Student loan: $10,000 / $150 payment
  • Medical debt: $1,500 / $75 payment

With the snowball method, you would make minimum payments toward all of your debts and allocate any extra payments toward the medical bill since it has the smallest balance. If that extra amount is $200 per month, you’d make payments of $275 until the medical bill gets paid off in about six months.

Next, you’ll take that $275 and roll it into your $75 credit card debtpayment, paying $350 monthly for around 11 months until that debt gets knocked off the list.

Then, add that $350 to your $150 student loan payment for a whopping $500 monthly. The snowball method can really make payments add up fast. Using this method, it would only be around 15 more months until your student loan balance lost the snowball fight.

Last but not least, roll all of the above into your car loan payment, allowing you to pay $750 a month toward a $250 monthly car payment. If you’ve kept up with minimum payments, this account is already halfway paid off, and it would only take nine more months to finish the job.

This means you’ll be debt-free in around 41 months using the debt snowball method, instead of 60 or more months by making minimum payments.

Debt Snowball Method: Should You Use It?

A graphic overviews the pros and cons of the debt snowball method, as part of a debt snowball calculator, including the benefit can be it provides a more manageable debt repayment journey and the downside that it can allow for interest to accumulate on larger balances. Including text: Debt Snowball: Is It Worth It? PRO Reducing the number of payments you make leads to a more manageable debt repayment journey. CON Focusing payments toward smaller accounts allows interest to accumulate on larger balances.

Debt snowballing can be a faster way to pay down debt balances, but it’s not the right method for everyone. The snowball method may not be the best solution if you have lots of high-interest debt, especially on larger balances. Alternatively, if you have lots of small debt balances, a debt snowball can knock out debt quickly.

It’s not recommended to include mortgage debts in debt snowball or debt avalanche calculations, since monthly mortgage payments often include costs like property taxes and insurance that you’ll continue to pay when the home is paid off.

  • Pro: A debt snowball can quickly decrease the number of individual payments you have to make, shortening your list of debts and setting your sights on being debt-free.
  • Con: By making payments on your smallest accounts, your larger balances will continue to accumulate interest, and you could end up paying more in interest down the line.

There’s not always a single solution to total debt elimination. If you think the snowball method may work for you but you’re unsure, or you’re curious about combining it with another debt repayment strategy, the Mint app can help you budget for your debt repayment and saving goals.

Snowball vs. Avalanche: What’s the Difference For Your Debt?

A graphic overviews the difference between the debt snowball method and debt avalanche method, as part of a debt snowball calculator. Some of those main differences include that the debt snow ball uses additional money to target small balances to the debt avalanche uses additional money to target higher interest balances. Included text: Snowball vs. Avalanche S ( % + Debt Snowball Debt Avalanche Use additional money to target smallest balances © Roll payments from smaller balances toward larger ones O Pay off your loans quicker Use additional money to target highest interest balances © Roll payments from smaller balances toward high interest O Reduce your total interest owed

While a debt snowball involves rolling minimum payments together to target your smallest balances first, avalanching takes a different approach.

A debt avalanche targets high-interest debt first, like credit card debt. The debt avalanche method involves putting any extra money toward your balance with the highest interest rate. When that’s paid off, or you pay off a smaller loan balance with minimum payments, roll that payment into your next highest interest loan.

A debt snowball aims to pay down debt quickly, but a debt avalanche is a strategy that aims to reduce your interest as much as possible. If you have lots of high-interest loan balances, a debt avalanche may be the better option for you instead of a debt snowball.

Planning an effective debt repayment strategy might seem daunting at first, but there are several ways to manage your debt in a way that works for you. The Mint app can help you to start saving money to put toward extra loan payments and help crush your loan balances quicker.

Debt Snowball FAQs

Here are a few common questions about the debt snowball method.

Is Snowballing the Best Way To Pay Off Debt?

Debt repayment is different for everyone, and what works best for you may not work best for your neighbor. The debt snowball method can be a great way to reduce your loan balances if you have lots of smaller loan balances and few high interest loans.

How Long Does it Take To Snowball Debt?

The length of time it takes you to pay off your loans using the debt snowballing method depends on the total balance of your loans, their interest rates, and the availability of extra money to put toward repayment. Always aim to pay more than the minimum if you’re able to.

What if Two Loans Have the Same Balance?

You should aim to make the minimum payment on all of your loans. If two loans have the same balance, you’ll likely pay them off around the same time, meaning you can snowball both of those payments toward your next largest loan.

Should I Use My Savings To Snowball Debt?

It’s not ideal to use retirement savings to pay down debt since doing so comes with large tax liabilities and possibly fees for early withdrawal. You should look to use extra money to increase your payments, but only if doing so won’t negatively impact your saving goals.

Is It Okay To Pause a Debt Snowball?

Pausing a debt snowball temporarily can help you cover unexpected expenses as they come up. You may want to mark any money for resuming future snowball payments so you don’t have to decrease payments when you resume snowballing.

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