The debt avalanche method saves the most in interest, while the snowball method builds momentum with quick wins.
Avalanche: Pay minimums on all debts, put extra toward highest-interest debt first.
Snowball: Pay minimums on all debts, put extra toward smallest balance first.
Reach for this tool whenever a financial decision hinges on this type of calculation. Small differences in rate or term become large differences in total cost or return over multi-year horizons — differences that only become visible when you run the actual numbers.
The most consequential mistake is comparing financial figures that are not on the same basis — gross versus net, before-tax versus after-tax, or nominal versus inflation-adjusted. Always check whether figures you are comparing use the same definition.
A first-time buyer models three scenarios before making an offer: 10%, 15%, and 20% deposit on a £280,000 property. The calculator shows exactly how the monthly payment and total interest cost change with each deposit level, making the decision visible rather than speculative.
Debt avalanche always saves more in interest. Snowball costs slightly more but builds confidence faster.
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