Debt payoff calculator: snowball vs avalanche

How the calculator works

You enter each debt’s balance, interest rate and monthly payment, plus what you can pay on top. The calculator then goes month by month:

1. Every debt is charged a month’s interest: balance × rate ÷ 12.
2. Every monthly payment is made, as agreed.
3. The extra goes to one target debt. When that debt is cleared, its payment is not spent elsewhere: it joins the extra (the “rollover”), so the amount you pay in total stays the same until you are debt-free.
4. Snowball: the target order is smallest balance first. Avalanche: highest interest rate first.

Step 3 is the biggest lever. Without the rollover your monthly payments fall with each debt you clear. That feels good but costs money: the remaining debts run longer and keep charging interest. Keep paying the freed amount and you won’t notice it in daily life, but you finish much sooner.

The result is your debt-free date and the total interest for both methods, plus a comparison with paying only the agreed payments, without the extra and without the rollover.

Example: overdraft, loan and credit card

A typical German mix: an overdraft (Dispo) of €2,000 at 12%, a consumer loan (Ratenkredit) of €8,000 at 6.9% with €190 a month, and €1,200 on a credit card at 18%. With €200 extra, €480 a month in total, all €11,200 are gone in 2 years 2 months, with €983 interest. Paying only the agreed amounts would take 4 years 4 months and cost €2,160.

Here both methods are the same: the credit card is the smallest debt and the most expensive, the overdraft comes next on both counts. That is common, and it means the choice doesn’t matter for you.

It does matter when a small debt is cheap. Swap the loan for a nearly finished car loan of €1,500 at 3.9 % and make the card €4,500 at 19.9 %: the snowball clears the car loan first, the avalanche the card. Both finish in 1 year 7 months, but the avalanche saves €193 interest.

Snowball or avalanche: which should you choose?

The avalanche is the cheaper method. The snowball buys motivation: the first debt disappears sooner, and you have fewer bills to track. If a quick win keeps you going, the extra interest can be worth it; the calculator shows what it costs in euros. Whatever you choose, the extra and the rollover matter more than the order: in the example above the extra saves €1,176 in interest.

Two German specifics help. A consumer loan can be repaid early at any time, with a fixed rate for at most 1 % of the amount (§ 502 BGB), so extra money on a Ratenkredit is rarely wasted. And an overdraft is so expensive that replacing it with a cheaper instalment loan can beat both methods.

Before you start: three checks

1. Find the right rate. Enter the nominal rate (Sollzins) from your contract or statement. The effective annual rate (effektiver Jahreszins) is a little higher because it includes compounding and fees; use it to compare offers.
2. Stop the debt from growing. Paying off a card you keep using is running on the spot. Lower the overdraft limit once it is cleared if the temptation is real.
3. Ask about a cheaper loan. If the overdraft or card is large, a consumer loan at a lower rate can replace it. Compare the effective annual rate and the total cost, not only the monthly payment.

What it can’t see

It assumes fixed rates and payments, no new spending on the card and no fees. It doesn’t check whether the extra is really free each month, or whether part of it should first go into a cash cushion; the emergency fund calculator answers that. Once you are debt-free, the payments are free to invest: the ETF savings plan calculator shows what they can grow to. Zenarios plans debt, saving and the rest of your life in one forecast.

Common questions

What is the difference between the debt snowball and the avalanche?

Both pay every minimum and put all extra money on one debt at a time; when it is cleared, its payment rolls over to the next. The snowball targets the smallest balance first, for quick wins. The avalanche targets the highest interest rate first, which costs less interest.

Which method saves more money?

The avalanche, as long as you stick to it: the most expensive money goes first. How much it saves depends on your debts. With a €2,000 overdraft at 12 %, a €1,500 loan at 3.9 % and a €4,500 card balance at 19.9 %, paying €490 a month, it saves about €193 over the snowball. When your smallest debt is also the most expensive, both methods are the same.

Can I pay off a German consumer loan early?

Yes. Under § 500 BGB you can repay a consumer loan (Ratenkredit) in full or in part at any time. With a fixed rate, the lender may charge compensation of at most 1 % of the amount repaid early, or 0.5 % if a year or less of the term is left, and never more than the interest you would have paid.

My overdraft has no minimum payment. What do I enter?

Enter what you can pay back each month, as if it were a loan instalment. An overdraft (Dispo) is one of the most expensive ways to borrow. If you use more than 75 % of it on average for six months, your bank must offer you advice on cheaper alternatives (§ 504a BGB).

What if my payment doesn't cover the interest?

Then that debt grows every month until the extra payment reaches it, and the calculator warns you. If your total payments can't outpace the interest, you won't be debt-free at all: raise the payments or look for a cheaper loan to replace the most expensive debt.

Sources

• § 500 BGB: early repayment of consumer loans
• § 502 BGB: early repayment compensation
• § 504a BGB: advice duty for long overdraft use

By Constantin Metz, the maker of Zenarios · Reviewed 25 October 2026. Results are estimates from your inputs and simplified rules, not financial, tax or legal advice. How Zenarios calculates