Debt Snowball Calculator
This debt snowball calculator accelerates your debt payoff by using the "rollover" method. As soon as the first debt is paid off use the freed-up payment amount to pay down the next debt even faster. Continue the process (building like a snowball) until all debts are paid off. As you are about to discover, the debt snowball method is the most cost effective, fastest, and emotionally satisfying way to get out of debt.
Instructions: Order your debts from highest interest rate to lowest interest rate to save the most money. The calculator pays them off in the order entered. Alternatively, you can create a debt snowball by ordering your debts from smallest balance to highest balance for the greatest emotional satisfaction - although it will cost you a little more interest. Enter the name, current balance, interest rate and minimum payment amount for all of your debts (up to a maximum of 10 debts). Next, enter a monthly dollar amount you could add to your accelerated debt payoff plan at the bottom right of the calculator. Then, click the "Calculate Debt Snowball" button.
Note: If you include your mortgage in your accelerated debt payoff plan then be sure to enter only the principal & interest portion of your monthly mortgage payment (don't include monthly tax and insurance portion as that expense never gets paid off).
How Fast Can You Get Out Of Debt Using The Debt Snowball Calculator?
Your debt payments seem endless.
You’re sick and tired of slaving under the debt monster and want to be free.
You wish there was a quick and efficient way to get out of debt that actually worked.
Thankfully, there is. The debt snowball plan has helped thousands of people find freedom from debt.
Our Debt Snowball Calculator makes the process easy. Simply fill out the form with all your debts, enter a monthly dollar amount you can add to your payoff plan, and click the “Calculate Debt Snowball” button. You can even create a payment schedule and payoff summary.
Below is more information about the debt snowball plan to help you break free of the debt monster . . .
Why Is It Called A Debt Snowball?
The debt snowball plan is a strategy to pay off debts in order – one by one – by rolling your payments over like a snowball from one debt to the next. You can order your list of debts by interest rate or balance – the choice is yours.
It’s called a “debt snowball” plan because you take the payments you were making to a paid-off debt and apply them to the next debt on your list. Your payments, therefore, grow with time and build momentum and effectiveness – much like a snowball rolling down a hill.
The Debt Snowball Calculator shows the benefits of applying the payments of recently paid-off debts to other debts. Not only do you save time, but you save lots of money.
Debt Snowball Plan Best Practices And Requirements
Before you start your debt snowball plan, it’s important to know some best practices and requirements:
- Find the annual percentage rates and balances – You must know the annual percentage rates of all your debts. Rank them by listing the debts with the highest interest rate down to the lowest interest rate to save the most money. For quick, motivating wins, list from lowest balance to highest balance instead. That is known as a “debt avalanche”.
- Calculate how much you can afford – Calculate how much you can afford to pay for each debt at the end of each month. Put extra amounts toward the debt at the top of your list. Cut back some of your expenses to generate more cash to pay debts. Avoid taking on new debt as much as possible.
- Stick to your plan – When implementing the debt snowball plan, you need to pay the minimum amount due on all your other debts, except the one at the top of your list. Once you pay off your first debt, apply the payment from that debt to the next one – don’t pocket the savings. Continue to pay only the minimum amount on all of your other debts. Eventually you will work down the list until they are all paid off.
By keeping your lifestyle down while paying your debts, you’ll be able to continue paying the same overall amount of money every month until all your debts are gone. It’s one of the fastest, most efficient, and emotionally rewarding ways to get out debt!
Stay Out Of Debt
Once you’re out of debt, stay out of it! Here’s how:
- Avoid overspending with credit cards – The problem with credit cards is they make it too easy to spend beyond your means making them one of the top sources causing consumer debt. If you’re going to use credit cards, do so within the context of a budget.
- Live within your means by budgeting – The most difficult part of budgeting is starting. You must persist for several months before you see results. Most people find saving positively addictive once the asset snowball begins growing.
- Align your spending with your values – The key to controlling spending is to not desire “stuff” in the first place. Will the latest smartphone, sports car, or flat-screen television really make a difference in your life? Probably not, but the debt from overspending will. When you learn to align your spending with your values you will naturally decrease your consumption by choosing experiences over stuff.
- Find accountability – Talk with your spouse or a close friend about your commitment to remain debt free. The social pressure works to keep you committed until you reach your goals.
The key to staying out of debt forever is to replace the bad habits that created debt in the first place with wealth producing habits. Once you’ve changed your spending habits then your growing wealth will reflect the new pattern.
The Debt Snowball Calculator gives you the tools you need to forecast your payments and savings. Financial experts agree: the debt snowball plan is an excellent way to pay off your debt quickly and systematically.
Once you’re out of debt, you’ll be able to put more money toward investments, vacations, and so much more. Close your eyes and imagine a life without debt. Make it a reality and try out the Debt Snowball Calculator today!
Debt Snowball Calculator Terms & Definitions
- Debt Snowball – A process by which debts are paid off one by one, ordered according to interest rate or balance, and paid-off debts’ payments are rolled over to remaining debts.
- Creditor – A person or company to whom money is owed.
- Balance Owed – The outstanding amount you still owe a creditor.
- Interest Rate – The percentage amount paid for the use of money.
- Payment Amount – The amount you regularly pay to your debts. In the case of the debt snowball, minimum payments are made on all debts except for the debt at the top of the list.
- Interest Cost – The total amount of interest charged for your debts.
- Payment Schedule – A list of your payments over the course of your debt snowball plan.
- Payoff Summary – An overview of your balance and payments at certain intervals of time.
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