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What Banks Hide

What's the payoff order banks don't want you to know?

Compare avalanche vs snowball strategies. See exactly how much faster and cheaper the optimal order pays off your debts.

Your Debts

Total: $25,000

Extra Monthly Budget

Total monthly: $800

Time to Debt-Free

Minimum Only11yr 5mo - $11,377 interest
Avalanche3yr 5mo - $2,718 interest
Snowball3yr 4mo - $2,806 interest

Payoff Milestones (Avalanche (Highest Rate))

1

Credit Card

Paid off in month 15 (1yr 3mo)

Total interest so far

$1,932

2

Car Loan

Paid off in month 32 (2yr 8mo)

Total interest so far

$2,651

3

Student Loan

Paid off in month 41 (3yr 5mo)

Total interest so far

$2,718

Balance Over Time

Each color represents a different debt shrinking to zero.

Credit Card
Car Loan
Student Loan

With an extra $300/mo, the avalanche (highest rate) strategy gets you debt-free 8 years and 0 months sooner, saving $8,659 in interest. Your first win: Credit Card paid off in just 15 months!

Debt Payoff Strategies
whatbankshide.com
Strategy: Avalanche (Highest Rate)
Debt-free in3 yr 5 mo
Total interest$2,718
Interest saved$8,659
Time saved vs minimums8 yr 0 mo
Total debt$25,000

How It Works

Both strategies make minimum payments on all debts, then apply your extra budget to one debt at a time. The difference is which debt gets the extra money first.

Avalanche: Targets the debt with the highest interest rate first. This minimizes total interest paid because you're attacking the most expensive debt.

Snowball: Targets the debt with the smallest balance first. This eliminates individual debts quickly, creating momentum and motivation. When one debt is paid off, its minimum payment rolls into the next.

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Frequently Asked Questions

What's the difference between avalanche and snowball?
Avalanche targets the highest-interest debt first, saving the most money mathematically because you eliminate the most expensive debt before it accrues further interest. Snowball targets the smallest balance first, giving quicker psychological wins by letting you completely eliminate individual debts sooner. Both strategies make minimum payments on all debts and direct any extra budget to the priority debt. Both are far better than minimum payments only, which can keep you in debt for decades. Read our full comparison at /guides/debt-avalanche-vs-snowball.
Which strategy is better?
Avalanche always saves more in total interest. But snowball eliminates individual debts faster, which keeps many people motivated. The 'best' strategy is the one you'll actually stick with. If you're disciplined, go avalanche. If you need quick wins, go snowball.
How much extra should I put toward debt?
Any extra amount helps significantly. Even an extra $100-200/month can save thousands in interest and shave years off your debt-free date. The key is consistency - a smaller amount you can sustain every month beats a large amount you abandon after three months. Start with whatever fits your budget after covering essentials and a small emergency fund, then increase the extra payment as you free up cash from paid-off debts.
Should I pay off debt or save for emergencies first?
Most financial advisors recommend building a small emergency fund ($1,000-$2,000) first, then aggressively paying down high-interest debt (above 7-8%), then building a full 3-6 month emergency fund.
Does this calculator account for minimum payment changes?
This calculator uses fixed minimum payments. In reality, some credit cards reduce your minimum as the balance drops. Keeping your payment amount the same as the balance drops accelerates payoff even more.