# Debt Payoff: Avalanche vs Snowball @icon(trending-down) @category(finance) @skin(form) > List your three biggest debts, add whatever extra you can pay, and watch the two classic strategies race: months to freedom and interest paid, side by side. #debt #avalanche #snowball #credit-cards #r-personalfinance #reddit # Your debts @controls @density(compact) @icon(credit-card) profile = "" // buttons({Card heavy: {$debt 1 balance: 6500, debt 1 apr: 24.99, $debt 1 minimum: 130, $debt 2 balance: 12000, debt 2 apr: 7.9, $debt 2 minimum: 250, $debt 3 balance: 3200, debt 3 apr: 17.5, $debt 3 minimum: 80}, Student and car: {$debt 1 balance: 24000, debt 1 apr: 6.8, $debt 1 minimum: 280, $debt 2 balance: 14000, debt 2 apr: 7.9, $debt 2 minimum: 310, $debt 3 balance: 2800, debt 3 apr: 22.99, $debt 3 minimum: 70}, One big card: {$debt 1 balance: 9800, debt 1 apr: 27.99, $debt 1 minimum: 200, $debt 2 balance: 0, debt 2 apr: 0.1, $debt 2 minimum: 0, $debt 3 balance: 0, debt 3 apr: 0.1, $debt 3 minimum: 0}}) @label(One-tap examples) @icon(zap) $debt 1 balance = 6500 // 0..60k by 100 @label(Debt 1 — balance) debt 1 apr = 24.99 // % 0..36 by 0.25 @label(Debt 1 — APR) $debt 1 minimum = 130 // 0..2k by 10 @label(Debt 1 — minimum payment) $debt 2 balance = 12000 // 0..60k by 100 @label(Debt 2 — balance) debt 2 apr = 7.9 // % 0..36 by 0.25 @label(Debt 2 — APR) $debt 2 minimum = 250 // 0..2k by 10 @label(Debt 2 — minimum payment) $debt 3 balance = 3200 // 0..60k by 100 @label(Debt 3 — balance) debt 3 apr = 17.5 // % 0..36 by 0.25 @label(Debt 3 — APR) $debt 3 minimum = 80 // 0..2k by 10 @label(Debt 3 — minimum payment) # Your attack @controls @icon(zap) $extra each month = 200 // 0..2000 by 25 @label(Extra beyond the minimums) @tooltip(Whatever you can spare above the minimums. Both strategies aim all of it — plus every freed-up minimum — at one debt at a time.) # Engine @hidden _b1 = debt 1 balance _b2 = debt 2 balance _b3 = debt 3 balance _r1 = max(debt 1 apr, 0.01) / 100 / 12 _r2 = max(debt 2 apr, 0.01) / 100 / 12 _r3 = max(debt 3 apr, 0.01) / 100 / 12 _mp1 = debt 1 minimum _mp2 = debt 2 minimum _mp3 = debt 3 minimum _tt(b, r, p) = if(b <= 0, 0, if(p <= b * r, 1200, NPER(r, -p, b))) _left(b, r, m, t) = max(0, b * (1 + r)^t - m * ((1 + r)^t - 1) / r) _t3(ba, ra, ma, bb, rb, mb, bc, rc, mc, e) = _tt(ba, ra, ma + e) + _tt(_left(bb, rb, mb, _tt(ba, ra, ma + e)), rb, ma + mb + e) + _tt(_left(bc, rc, mc, _tt(ba, ra, ma + e) + _tt(_left(bb, rb, mb, _tt(ba, ra, ma + e)), rb, ma + mb + e)), rc, ma + mb + mc + e) _tav(e) = if(_r1 >= _r2, if(_r2 >= _r3, _t3(_b1, _r1, _mp1, _b2, _r2, _mp2, _b3, _r3, _mp3, e), if(_r1 >= _r3, _t3(_b1, _r1, _mp1, _b3, _r3, _mp3, _b2, _r2, _mp2, e), _t3(_b3, _r3, _mp3, _b1, _r1, _mp1, _b2, _r2, _mp2, e))), if(_r1 >= _r3, _t3(_b2, _r2, _mp2, _b1, _r1, _mp1, _b3, _r3, _mp3, e), if(_r2 >= _r3, _t3(_b2, _r2, _mp2, _b3, _r3, _mp3, _b1, _r1, _mp1, e), _t3(_b3, _r3, _mp3, _b2, _r2, _mp2, _b1, _r1, _mp1, e)))) _tsb(e) = if(_b1 <= _b2, if(_b2 <= _b3, _t3(_b1, _r1, _mp1, _b2, _r2, _mp2, _b3, _r3, _mp3, e), if(_b1 <= _b3, _t3(_b1, _r1, _mp1, _b3, _r3, _mp3, _b2, _r2, _mp2, e), _t3(_b3, _r3, _mp3, _b1, _r1, _mp1, _b2, _r2, _mp2, e))), if(_b1 <= _b3, _t3(_b2, _r2, _mp2, _b1, _r1, _mp1, _b3, _r3, _mp3, e), if(_b2 <= _b3, _t3(_b2, _r2, _mp2, _b3, _r3, _mp3, _b1, _r1, _mp1, e), _t3(_b3, _r3, _mp3, _b2, _r2, _mp2, _b1, _r1, _mp1, e)))) _P = _b1 + _b2 + _b3 _allmins = _mp1 + _mp2 + _mp3 _mav = _tav(extra each month) _msb = _tsb(extra each month) _iav = (_allmins + extra each month) * _mav - _P _isb = (_allmins + extra each month) * _msb - _P _iavf(e) = (_allmins + e) * _tav(e) - _P _firstwin = if(_b1 <= _b2, if(_b1 <= _b3, _tt(_b1, _r1, _mp1 + extra each month), _tt(_b3, _r3, _mp3 + extra each month)), if(_b2 <= _b3, _tt(_b2, _r2, _mp2 + extra each month), _tt(_b3, _r3, _mp3 + extra each month))) _n1 = if(_b1 > 0, if(_mp1 <= _b1 * _r1, 1, 0), 0) _n2 = if(_b2 > 0, if(_mp2 <= _b2 * _r2, 1, 0), 0) _n3 = if(_b3 > 0, if(_mp3 <= _b3 * _r3, 1, 0), 0) _never = _n1 + _n2 + _n3 _monthnames = ["Jan", "Feb", "Mar", "Apr", "May", "Jun", "Jul", "Aug", "Sep", "Oct", "Nov", "Dec"] _freeby = today() + round(_mav) * 1 month _tmin = max(_tt(_b1, _r1, _mp1), max(_tt(_b2, _r2, _mp2), _tt(_b3, _r3, _mp3))) _imin = _mp1 * _tt(_b1, _r1, _mp1) + _mp2 * _tt(_b2, _r2, _mp2) + _mp3 * _tt(_b3, _r3, _mp3) - _P # The race @results @icon(flag) debt free by = concat(_monthnames[month(_freeby) - 1], " ", year(_freeby)) @hero @label(Debt-free (avalanche)) $total owed today = _P $interest with avalanche = _iav @label(Interest — avalanche (highest APR first)) $interest with snowball = _isb @label(Interest — snowball (smallest balance first)) $avalanche saves = _isb - _iav @accent @show(_isb - _iav > 1) @note(Same monthly outflow, different target order. Avalanche kills the expensive debt first, so less interest survives.) heads up = "🚨 These payments never finish the job — the interest outruns them. Raise the extra payment." // @show(_mav >= 1200) @label(Reality check) @accent /// Snowball's counter-pitch: your first "PAID OFF" lands in {round(_firstwin)} months, and that win keeps people going. r/personalfinance's honest answer: avalanche is math, snowball is psychology — the best strategy is the one you'll stick to. /// On minimums alone: {if(_never > 0, "never — the interest on one of these debts outruns its own minimum.", concat("debt-free in ", round(_tmin / 12, 1), " years — but see the interest rows above for what that patience costs."))} # The law of extra dollars @tab @icon(chart-spline) _es = map(sequence(11), i => i * 100 - 50) _ecurve = map(_es, x => _iavf(x)) interest curve = line(_ecurve, _es, {xlabel: "Extra paid per month", ylabel: "Total interest"}) @label(Total interest, by extra dollars paid per month) /// The curve is steepest at the start — the first 100 extra dollars a month save more interest than the fifth 100. Diminishing returns are built into debt, and they work in your favor early. # What this leaves out @tab @icon(info) > Three debts, fixed APRs, and minimums that stay constant (card issuers shrink minimums as balances fall, which quietly stretches payoff for decades — paying a fixed amount is the whole trick). Freed-up minimums roll into the attack. No new charges. Two debts? Set the third's balance and minimum to zero.