Your Debts
Start by listing out your non-mortgage debts.
Debt 1
Your Household Income
This includes any income you make each month after taxes (your paycheck, your side hustle—it all counts).
Additional Payment
To snowball your debt, enter the additional amount you want to pay above the minimum required payment.
Your Debt-Free Date
Enter your debts to see when you'll be debt-free
What Is the Debt Snowball?
The debt snowball is a debt payoff method where you pay your debts from smallest to largest, regardless of interest rate. Knock out the smallest debt first. Then, take what you were paying on that debt and add it to the payment of your next smallest debt.
Why a snowball? Because just like a snowball rolling downhill, paying off debt is all about momentum. With every debt you pay off, you gain speed until you're an unstoppable, debt-crushing force.
List your debts from smallest to largest regardless of interest rate.
Make minimum payments on all your debts except the smallest.
Pay as much as possible on your smallest debt.
Repeat until each debt is paid in full.
What happens then? Freedom. No more payments. No more watching your paychecks disappear. When you get hyper-focused and start putting every dollar you can toward your debt, you'll see how much faster you can pay it all off.
Debt Snowball vs. Debt Avalanche
You may have heard of another method—the debt avalanche. With the avalanche, you pay debts in order from highest interest rate to lowest, regardless of balance.
That might sound like smart math. Here's why the snowball often works better: Debt isn't just a math problem. It's a behavior problem.
If you want to change your behavior and get out of debt, you need to stay motivated. With the debt avalanche, you may not see progress on your first debt for a long time. But when you use the debt snowball, you get quick wins sooner. That momentum keeps you going until you're completely debt-free.
Debt Terms Explained
Minimum Payment
The lowest amount you're required to pay on a debt every month. This includes principal and interest.
Balance
The amount you still have to pay on your debt. If your original loan was $20,000 and you've paid $5,000, your balance is $15,000.
Interest Rate
How much lenders charge you to borrow their money, usually shown as an annual percentage of the principal balance.
Principal
The amount of money you borrowed without the interest added. This is the base amount your interest is calculated on.
Non-Mortgage Debt
Everything you owe except for loans related to your home purchase. This includes car loans, credit cards, and student loans.
Debt-Free Date
The day when every cent of your consumer debt is history. Time to celebrate your financial freedom!