How to Use a Debt Snowball Calculator to Pay off Debt

Choosing the right calculator and having a good plan can help you eliminate debt faster.

Written by Ben Luthi / July 7, 2022

Quick Bites

  • The debt snowball method is designed to help you pay off your debt faster.
  • Debt snowball calculators can vary in the results and features they offer.
  • Compare several options to find the calculator that works best for you and create a budget to maximize your savings.

For some, paying off debt can feel like a daunting task. But with the right tools and strategy, you may be able to shave months or years off of your debt sentence and save hundreds or even thousands of dollars in interest along the way.

The debt snowball method is a tried-and-true approach to paying off debt, and with the right debt snowball calculator, you can get an idea of how much time and money you can save and make adjustments to improve your plan.

Inside this article

  1. What's the debt snowball method?
  2. How can a calculator help?
  3. How to find the right calculator
  4. How to use a snowball calculator
  5. Don't forget to make your budget

What is the debt snowball method?

The debt snowball method is designed to start out small and accelerate your debt payoff over time—the image of a snowball growing with size as it rolls down a hill is apt.[1]

This approach to paying off debt works best if you can put some extra cash toward your loans and credit cards, but it's not necessary. You'll start by making the minimum payment on all of your debt accounts. If you can afford to pay extra, you'll put that toward the loan or credit card with the lowest balance.[1]

Once that account is paid off, you'll take the total amount you were putting toward it and add it to the minimum payment on the account with the next-lowest balance. You'll keep repeating this process with each of your accounts until you've paid off the last one.[1]

"The great thing about the snowball method is that you see your progress," says Jay Zigmont, a Certified Financial Professional and founder of the financial planning firm Live Learn Plan. "By starting with your smallest debt first, you get to celebrate a win as soon as it is paid off."

Headshot of Certified Financial Planner Jay Zigmont

Meet the Expert

Besides his work as a CFP, Zigmont wrote a book called “Portraits of Childfree Wealth” to help adults without kids think about their finances. Zigmont also received a Ph.D. in adult learning from the University of Connecticut.

How can a debt snowball calculator help?

You don't necessarily need to use a debt snowball calculator to succeed with this debt payoff strategy. However, a calculator can tell you how quickly you can pay off your debt and how much interest you can save based on your account balances, interest rates, minimum payments and extra payment amount.

If you can afford an extra monthly payment, you can adjust that up or down to see how it changes the debt payoff date and interest savings.

Having this visualization can help motivate you to achieve your goal of becoming debt-free and also make it easy to make adjustments as you work toward it.

Here's an example of a what a debt snowball calculator might look like.

Example of a debt snowball calculator
Calculators.org

How to find the right debt snowball calculator

There are many different options out there, but not all are created equal. Some websites offer debt snowball calculators that you can use once, but they won't save your work. So, if you're getting started and just want to get an idea of what it might look like, you may consider using a website like Calculators.org or Omni Calculator.

However, there are websites and apps that will save your information, so you can go back to it and track your progress over time.

Some options offer even more features to assist you on your debt-free journey. For example, Undebt.it allows more customization of your payoff plan, helps you keep track of your payments, lets you compare the debt snowball method to other popular approaches and provides various reports.[2] This option may be especially useful if you want to compare the potential savings between the debt snowball and debt avalanche methods, among others.

Tip

"The debt avalanche method is mathematically better as you attack the higher interest debt first," says Zigmont. "But [you] don't get the early wins. In most cases, I recommend the snowball method as people are more likely to keep working on their debt, even if the math isn't perfect.

Unbury.me is an option that allows you to use its calculator once or to sign up and save your information for regular tracking.

Other websites and apps may charge a fee to use their debt snowball calculator and other features, but only consider these options if it's worth it to you.

How to use a debt snowball calculator

Different calculators can vary in what information you'll need, but, in general, you'll want to know the following details about each loan or credit card:

  • Creditor name

  • Current balance

  • Interest rate

  • Minimum monthly payment

  • Additional monthly payment

You can get information about your debt by logging in to your financial accounts. Once you enter it into the calculator, you'll typically get several results, including your original and new debt-free dates, as well as the total amount paid and total interest charges with and without the debt snowball approach.

Chart from a debt snowball calculator
Omni Calculator

Some calculators, like Omni's (see left), may even provide you with a chart showing balances and payoffs for each account over time.

If you have some flexibility with your additional monthly payment, use the calculator to see how higher and lower payments will impact your time and interest savings. Then choose an amount that you can afford and can help you maximize those savings.

Create a budget to make the most of your debt snowball

The debt snowball method can make a significant difference in your debt payoff plan, so it's important to use it as effectively as possible.

One of the best ways to accelerate your debt snowball is to create a budget. Understanding where your money is coming from and where it's going can give you the vital information you need to maximize your savings.

Take a look at your average income over the last few months and categorize your expenses into different categories, such as rent, utilities, entertainment, eating out and more. Then take a look at your discretionary spending—non-essential purchases that you can forego if needed—and determine whether you can cut back. Finally, decide how much of that spending you can reasonably reallocate toward debt payments.

Without writing everything out, it can be difficult to know how much money you can afford to put toward your debt every month. Your budget can help you determine that, and as you set goals for spending each month, it'll help you stick to your plan over time.

Zigmont recommends locking your credit cards to avoid using them while you're working toward your goal.

"You need to eliminate debt as an option in your life if you are going to make progress," he adds.

Article Sources
  1. "Comparing the snowball and the avalanche methods of paying down debt," Wells Fargo, https://www.wellsfargo.com/goals-credit/smarter-credit/manage-your-debt/snowball-vs-avalanche-paydown/.
  2. "The Free Tool That Gets You Out of Debt," undebt.it, https://undebt.it/.

About the Author

Ben Luthi

Ben Luthi

Ben has been writing about money since 2013. He's been on staff at NerdWallet as a credit card writer and for Student Loan Hero, where he covered student loans and other personal finance topics. Ben's work has appeared in U.S. News, The New York Times, Experian, FICO, Credit Karma, Bankrate and more

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