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Finance & property Australia

Debt Payoff Calculator Australia

With several debts, the order you attack them in changes how much interest you pay. The avalanche method pays the highest rate first, the snowball method pays the smallest balance first. Enter up to four debts and an extra monthly amount to compare both.

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Debt-free in

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Avalanche: total interest

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Snowball: months

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Snowball: total interest

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Interest saved by avalanche

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Minimums only: months

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The two methods

    An estimate, not advice. General information and estimates only, not financial advice. Rates, fees and rules change, so check the lender's own terms and speak to a licensed adviser before you act.

    Should I pay the highest rate or the smallest debt first?

    The avalanche method, highest rate first, always costs the least interest; the snowball method, smallest balance first, can feel faster because debts disappear sooner. For $28,500 of debts and $200 extra a month, avalanche takes 38 months and $5,870 of interest, and snowball 39 months and $5,957.

    Choosing a method

    If the interest rates are very different, avalanche saves the most. If your debts are similar in rate or you struggle to stay motivated, snowball can be easier. You can also do a hybrid: clear a tiny debt first for a win, then switch to highest rate.

    Whichever you choose, keep paying the minimum on every debt so that you do not trigger late fees.

    Getting help

    If debt is hard to manage, free help is available. In Australia you can call the National Debt Helpline on 1800 007 007 to talk to a financial counsellor confidentially, who can help you negotiate with lenders and plan repayments.

    To compare a consolidation loan, use the loan comparison calculator.

    How this is calculated

    The rule, step by step, so you can check any figure by hand.

    • each month: interest = balance × rate ÷ 12 is added to every debt
    • every debt gets its minimum payment; the extra amount plus any freed-up minimums goes to one target debt
    • avalanche: the target is the debt with the highest rate
    • snowball: the target is the debt with the smallest balance
    • the months and the interest are totalled until every balance is zero

    Both methods use exactly the same money each month. The only difference is where the extra goes. When a debt is cleared, its minimum payment is rolled onto the next target, which is the effect that makes both methods speed up over time.

    Avalanche is the cheapest mathematically. Snowball costs a little more interest, but clearing small debts quickly gives early wins, and many people stick with a plan that feels like progress. The difference between the two is often modest, so the best method is the one you will stay with.

    A worked example

    Four debts totalling $28,500 with $200 extra a month.

    1. Avalanche: months38
    2. Avalanche: interest$5,870
    3. Snowball: months39
    4. Snowball: interest$5,957
    5. Minimums only: months54

    Avalanche: 38 months, $5,870 interest.

    Adding even a modest extra amount shortens the time a lot.

    Consolidation

    A single lower-rate loan that clears several higher-rate debts can cut interest, but only if you do not run the cards up again and the fees do not outweigh the saving. Compare the total cost with the loan comparison calculator.

    What it leaves out

    Changing rates, new spending, fees and promotional rates are not modelled. A debt whose minimum is below its monthly interest will never clear without extra payments.

    What this calculator does not do

    • Up to four debts
    • Constant rates, no new borrowing
    • Minimums as you enter them
    • An estimate, not advice

    Common questions

    What is the debt avalanche method?

    Paying the highest-interest debt first while paying the minimum on the rest.

    What is the debt snowball method?

    Paying the smallest balance first for quick wins.

    Which saves more money?

    Avalanche, by always attacking the highest rate.

    What happens when a debt is cleared?

    Its payment rolls onto the next target debt.

    Where can I get free help?

    Call the National Debt Helpline on 1800 007 007.

    Where these numbers come from

    Method last reviewed 2026-10-28 This calculator uses fixed rules rather than rates that change, and its method is re-checked against the sources above at least once a year. Out of date? Tell us and we will fix it.

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