Debt Snowball Calculator
Strategize your debt repayment journey by targeting smaller debts first.
Debt Free In
0 Years 0 Months
Total Interest
₹ 0
Total Paid
₹ 5,50,000
What is the Debt Snowball Method?
The Debt Snowball method is a debt reduction strategy where you pay off your debts in order of smallest to largest balance, regardless of interest rate. You make minimum payments on all debts except the smallest one, which you attack with extra funds. Once the smallest debt is cleared, you roll that payment amount into the next smallest debt, creating a 'snowball' effect.
How It Works
The calculator lists all your debts and sorts them by balance. It then projects your payoff timeline based on your extra monthly contribution. As each debt is paid off, the freed-up cash flow is added to the payment of the next debt.
Example Calculation
You have 3 debts: Credit Card (₹20k), Personal Loan (₹1L), Car Loan (₹5L). You have ₹5k extra/month.
- 1.Step 1: Pay minimums on all. Put ₹5k extra towards Credit Card.
- 2.Step 2: Once Credit Card is paid (say in 4 months), take its minimum payment + ₹5k and add to Personal Loan payment.
- 3.Step 3: Once Personal Loan is paid, roll everything to Car Loan.
- 4.Result: You build psychological momentum by seeing debts disappear quickly.
Why This Tool is Useful
- ✓Psychological Win: Quick wins keep you motivated to stick to the plan.
- ✓Simplifies Finances: Reduces the number of monthly bills you have to track.
- ✓Builds Discipline: Encourages a habit of aggressive repayment.
- ✓Flexible: You can adjust the extra payment amount as your income changes.
- ✓Clear Timeline: Shows you the exact date when you will be debt-free.
Tips & Comparison
- •Snowball vs Avalanche: If you are mathematically inclined, the 'Avalanche Method' (paying highest interest debt first) saves more money. But Snowball is better for motivation.
- •Stop New Debt: The most important rule is to stop borrowing while you are in the payoff phase.
- •Emergency Fund: Keep a small emergency fund (₹50k-₹1L) before starting aggressive repayment so you don't relapse into debt.
- •Sell Unused Items: Sell things you don't need to generate cash for a lump-sum payment on the smallest debt.