Avalanche and snowball
Both methods make the same minimum payments on every debt. They differ on one point: which debt the extra budget attacks first. The avalanche targets the highest rate, the snowball the smallest balance. As soon as a debt is cleared, its payment joins the budget and moves to the next one.
On the three sample debts, a €6,500 card at 18%, a €12,000 car loan at 6.5% and a €2,000 personal loan at 9%, the avalanche attacks the card, then the personal loan, then the car loan. The snowball starts with the personal loan, then the card, then the car loan.
Each month, every open debt accrues one twelfth of its annual rate, receives its minimum payment, then receives whatever is left of the budget in strategy order. The chart draws the total balance of both plans on the same scale.
- Balance: what is left to repay today.
- Annual rate: the contract rate, divided by twelve and applied every month.
- Min payment: the amount paid on that debt whatever else happens.
- Extra payment: what is added every month, on top of all the minimums.
How to use the planner
The three starting rows can be edited in place, and "Add a debt" opens more. Each row asks for a name, a balance, an annual rate and a minimum payment. The duration, the interest and the payoff order recompute on every keystroke.
Two settings apply to the whole plan: the extra payment and the strategy. They are the only two the page address carries. "Copy link" gives a URL that reopens the same extra amount and the same strategy, but not the list of debts, which stays in the browser and is sent nowhere.
"Use my loans" replaces the list with the loans saved in the account, when there are any. The planner answers the same way without an account, on figures typed by hand.
When the minimum payments do not cover the interest, no plan ever ends and the planner says so instead of showing a duration. A €6,500 card at 18% accrues €98 of interest in the first month, so a €95 payment lets the balance climb.
Reading the result
The large figure is the number of months between today and the last payment, for the selected strategy. The three boxes under the chart give that month as a date, the interest paid on this plan, and the interest gap between the two strategies.
On the sample values, €20,500 of debt, €500 of minimum payments and €150 extra a month, the avalanche clears everything in 37 months for €3,118 of interest. The snowball takes the same 37 months and costs €3,307, which is €189 more.
The folded table shows where that difference goes. The avalanche clears the card in month 26, after €1,363 of interest; the snowball clears it in month 27, after €1,687. The personal loan, on the other hand, goes in month 10 under the snowball against month 26 under the avalanche.
The extra amount moves the result more than the strategy does. Without it, both plans run 52 months and cost €5,145 each. With €150 a month, they drop to 37 months and a little over €3,100.
What the calculation shows
The gap between the two methods is small, the gap between payment levels is large. On these three debts, switching from the avalanche to the snowball changes the interest by €189. Going from €0 to €150 extra a month changes it by €2,027.
The extra budget is also what makes the two methods differ at all. At €0, nothing circulates until a debt is cleared, and the two plans coincide: 52 months and €5,145 of interest either way. Order only counts when there is something to direct.
The rate decides how fast a debt grows on its own. The 18% card, repaid alone at €160 a month, takes 64 months and costs €3,602 of interest. The same €6,500 with €150 extra a month clears in 26 months for €1,363.
Consolidating the debts moves the question to the rate of the new loan. The same €20,500 merged into a single loan at 8%, repaid at €650 a month as here, clears in 36 months for €2,592 of interest. The difference comes from the rate, not from the merge.
Frequently asked questions
Avalanche or snowball, what is the difference?
The avalanche repays the debt with the highest rate first, the snowball the one with the smallest balance first. The minimum payments are the same in both cases, only the order of the extra budget changes. On the three sample debts, the avalanche starts with the card at 18%, the snowball with the €2,000 personal loan.
Which method costs less?
The avalanche, by construction, since it puts out the most expensive interest first. On the sample values it costs €3,118 of interest against €3,307 for the snowball, which is a €189 gap over 37 months. The gap depends on the rates and balances involved, and it falls to zero when no extra payment circulates.
What are the minimum payments for?
They are paid every month on every open debt, whatever the strategy. When a debt is cleared, its payment does not disappear: it joins the extra budget and moves to the next debt. That rollover is what shortens the end of the plan, and it is why the last months go faster than the first.
What happens if the minimum payments do not cover the interest?
The balance climbs instead of falling and no plan ever ends. The planner then shows a message in place of the duration. A €6,500 card at 18% accrues €98 of interest in the first month, so a €95 payment does not bring it down.
Is debt consolidation modelled?
No, the calculation repays the debts as they are entered. A consolidation is simulated by replacing the rows with a single one, at the total balance and the rate of the new loan. The sample €20,500 merged at 8% and repaid at €650 a month clears in 36 months for €2,592 of interest, against 37 months and €3,118 keeping the three debts.
Does a shared link contain my debts?
No. The page address carries only the extra payment and the strategy. The balances, the rates and the names stay in the browser, and whoever opens the link gets the planner with the three sample debts.
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