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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

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Name Product Filter Values APR Min. Credit Score Loan Amount
Credible personal loans
3.99% to 35.99%
Fair to excellent credit
$600 to $100,000
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Best Egg personal loans
5.99% to 35.99%
600
$2,000 to $50,000
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5.4% to 35.99%
None
$1,000 to $50,000
This service looks beyond your credit score to get you a competitive-rate personal loan.
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5.94% to 35.97%
600
$1,000 to $50,000
Affordable loans with two simple repayment terms and no prepayment penalties.
LendingPoint personal loans
7.99% to 35.99%
585
$2,000 to $36,500
Get a personal loan with reasonable rates even if you have a fair credit score in the 600s.
SoFi personal loans
6.99 to 22.23%
680
$5,000 to $100,000
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LendingClub personal loans
6.34% to 35.89%
600
$1,000 to $40,000
A peer-to-peer lender offering fair rates based on your credit score.
Monevo personal loans
1.99% to 35.99%
None
$500 to $100,000
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1 - 8 of 8
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Name Product Amount saved Balance transfer APR Balance transfer fee Minimum Credit Score Filter values
Chase Freedom Flex℠
0% intro for the first 15 months (then 15.74% to 24.49% variable)
For each transfer: 3% intro fee ($5 min) in first 60 days, after that 5% ($5 min)
670
Get up to 5% cashback in rotating and newly added everyday categories. The refreshed Freedom Flex card has lots of earning potential.
PenFed Power Cash Rewards Visa Signature® Card
17.99%
3%
670
2% cash back for all PenFed Honors Advantage members and 1.5% cash back on all purchases made with your card.
Chase Freedom Unlimited®
0% intro for the first 15 months (then 15.74% to 24.49% variable)
For each transfer: 3% intro fee ($5 min) in first 60 days, after that 5% ($5 min)
670
This solid 1.5% cashback card gets even better with the addition of up to 5% back in categories like travel, drug stores and dining.
PenFed Platinum Rewards Visa Signature® Card
17.99%
3%
670
Earn 5x points on gas at the pump and 3x points on groceries. Earn 1x points on all other purchases.
Luxury Card Mastercard® Black Card™
0% intro for the first 15 billing cycles (then 16.49% variable)
$5 or 3% of the transaction, whichever is greater
670
Receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.
PenFed Gold Visa® Card
17.99%
3%
670
Low APR on all purchases including cash advances.
Luxury Card Mastercard® Titanium Card™
0% intro for the first 15 billing cycles (then 16.49% variable)
$5 or 3% of the transaction, whichever is greater
670
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Luxury Card Mastercard® Gold Card™
0% intro for the first 15 billing cycles (then 16.49% variable)
$5 or 3% of the transaction, whichever is greater
670
Earn 2% point value when redeemed for airfare or cash back through the Luxury rewards program.
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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.

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