Updated
How the payoff calculations work
One amortisation per debt, month by month
The planner does not apply a formula to your total debt. It amortises each balance separately, month by month: interest accrues on the outstanding balance at that debt’s own rate, the minimum payment is applied, and any surplus goes to a single target debt.
That monthly loop matters because interest compounds on what is left after each payment. A single closed-form calculation on the combined balance gives a different, and always optimistic, answer once the rates differ.
Avalanche and snowball differ only in the ordering
Avalanche directs the surplus to the highest interest rate first. It is arithmetically optimal: it always produces the lowest total interest and, usually, the earliest payoff date.
Snowball directs the surplus to the smallest balance first. It costs more in interest, sometimes substantially, but clears individual debts sooner. The planner shows both totals side by side rather than recommending one, because the gap is the only honest basis for choosing.
When a debt is cleared, its minimum payment is rolled into the surplus for the next target. That rollover is what accelerates both methods over time, and it is why the payoff curve is not a straight line.
What the projection assumes
It assumes fixed interest rates, a constant monthly payment, no new borrowing and no missed payments. Promotional rates that expire, variable rates, fees, and minimum payments that fall as the balance drops are not modelled, and a falling minimum payment is the single most common reason a real payoff takes longer than a projection.
This is a planning tool, not financial advice. It does not account for your wider circumstances, and it is not a substitute for regulated debt advice where you are in difficulty.
When the tool changes
The arithmetic does not change with the calendar, so this page changes only when the model itself does, a new payoff strategy, a correction, or a change in how a scenario is handled. Each page carries the date of its last revision, taken from the site’s version history, so a date that has not moved means the method has not moved either.
Reference material
The amortisation and the consumer guidance behind the tool follow these references: