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Debt snowball calculator

Build on your previous success with this debt relief strategy.

Popularized by financial guru Dave Ramsey, the debt snowball method is a way to tackle your debts a little at a time. If you’re intimidated by how much you owe, this strategy allows you to celebrate small victories and build momentum toward a debt-free life.

How is the debt snowball method calculated?

The debt snowball method helps you pay down your debts in order of smallest to largest, building up payments as you go. Follow these four steps to get started:

  1. Determine how much you can spend on debt. Create a budget that accounts for all of your spending, cutting out unnecessary expenses to increase the amount you have each month to put toward paying off your debt.
  2. List your debts from smallest to largest. Unlike the debt avalanche method, you only need to pay attention to the dollar amount of the loan or credit card — not the interest rate or overall cost. Although it may be less cost effective, the debt snowball strategy is designed to give you the confidence to keep going until everything is paid off.
  3. Pay as much as you can toward the smallest debt. After making the minimum monthly payments on all of your debts, put any extra money toward your smallest debt.
  4. Repeat with the next-smallest debt. Once that account is paid off, take the money you were using and apply it toward your next-smallest debt. Keep the snowball rolling and continue paying off your smallest debts first until you’re completely free of debt.

The debt snowball method in action

Let’s take a look at an example: Jacob is a single man in his late 20s who’s spent the last few years building his career. He’s recently gotten into a position where he can dedicate an extra $85 a month toward his loans and credit card bills.

Since he’s overwhelmed by how much debt he has, he decides to use the debt snowball method to stay encouraged.

To begin, Jacob lists out his debts from smallest to largest.

DebtBalanceMinimum payment
Credit Card A$500$40
Personal Loan A$1,500$80
Credit Card B$1,600$80
Car Loan$6,000$120
Student Loan$14,000$345

After making the minimum payments each month, he puts the extra $85 toward his smallest debt: Credit Card A.

Once that’s fully paid off, he tackles his next-smallest debt: Personal Loan A. Since he no longer has the $40 minimum payment for Credit Card A, he’s able to put an extra $125 a month toward paying down that loan.

He then repeats this process, paying off the next-smallest debt, until all of his credit cards and loans are fully paid off.

Compare solutions to pay off your debt

Name Product Filter Values APR Min. Credit Score Loan Amount
BHG personal loans
$20,000 - $200,000
A highly-rated lender with quick turnaround and reliable customer service.
Credible personal loans
2.49% to 35.99%
Fair to excellent credit
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Best Egg personal loans
5.99% to 29.99%
$2,000 - $50,000
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PenFed Credit Union personal loans
5.99% to 17.99%
$600 - $50,000
With over 80 years of lending experience, this credit union offers personal loans for a variety of expenses.
SoFi personal loans
4.99% to 19.63%
$5,000 - $100,000
A highly-rated lender with competitive rates, high loan amounts and no fees.

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Name Product Amount saved Balance transfer APR Balance transfer fee Minimum Credit Score Filter values
Citi® Diamond Preferred® Card
0% intro for the first 21 months (then 13.74% to 23.74% variable)
$5 or 5% of the transaction, whichever is greater

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An impressive 21 months intro APR on balance transfers and purchases, as well as no annual fee make this one of the top 0% APR cards available.
Citi Simplicity® Card
0% intro for the first 21 months (then 14.74% to 24.74% variable)
$5 or 5% of the transaction, whichever is greater
With an intro APR of 21 months, this card has one of the longest balance transfer offers on the market. Plus, no late fees and no annual fee.
Citi® Double Cash Card
0% intro for the first 18 months (then 13.99% to 23.99% variable)
$5 or 3% of the transaction, whichever is greater
Get a strong 18 month 0% intro APR on balance transfers AND up to 2% back. This is a rare card that offers both rewards and balance transfers.

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Bottom line

The debt snowball method may not be the most cost effective way to pay off your debts, but it can help keep you encouraged by giving you mini wins throughout the process.

Not sure this is the right approach for you? See how it stacks up to the debt avalanche method first.

Frequently asked questions

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