How to list your debts and pick a payoff order
To build a payoff plan, list every debt with its current balance, its APR, and its minimum monthly payment, then sort the list: smallest balance first for the debt snowball, or highest APR first for the debt avalanche. Getting the list right comes first, because the order, the payoff dates, and the interest all come from these three numbers.
This guide covers where to find each number, how the two methods rank the same list, and the special cases that may call for a closer look.
What to write down for each debt
- Balance. The amount you owe now. Your latest statement or online account shows it.
- APR. The annual interest rate on that balance. A card may have different rates for purchases, cash advances, and promotional balances, so note which rate applies to which part.
- Minimum payment. The least you must pay each month to keep the account current. On cards, it can change as the balance falls.
- Anything unusual. A promotional rate and when it ends, whether a loan is secured by property such as a car, whether a balance has deferred interest, and any prepayment penalty.
Include every debt you are paying, even small ones such as a medical bill on a payment plan. Leaving one out means the plan does not reflect your real budget.
How each method sorts the list
The snowball sorts by balance, smallest first. Our calculator breaks a tie in balance by putting the higher APR first, then follows the order you entered. The avalanche sorts by APR, highest first, and breaks a tie in rate by putting the smaller balance first. Rates and minimums do not change the snowball order, and balances do not change the avalanche order, except to break ties.
Worked example: one list, two orders
Here is a hypothetical list of four debts totaling $35,300, with minimums of $745 a month and a budget of $1,200, which leaves $455 a month above the minimums:
| Debt | Balance | APR | Minimum payment |
|---|---|---|---|
| Medical bill | $800 | 0% | $50 |
| Store card | $2,500 | 26.9% | $75 |
| Credit card | $14,000 | 29.9% | $420 |
| Student loan | $18,000 | 5.5% | $200 |
Running the list through the same math as our calculator gives these payoff orders:
| Snowball | Avalanche | |
|---|---|---|
| Payoff order | Medical bill (month 2), Store card (month 7), Credit card (month 23), Student loan (month 36) | Medical bill (month 16), Credit card (month 21), Store card (month 23), Student loan (month 36) |
| Debt-free in | 36 months | 36 months |
| Total interest | $7,763.38 | $7,406.10 |
The snowball starts with the 0% medical bill because it is the smallest, while the avalanche puts it last. Even so, under the avalanche the medical bill is still the first debt paid off, in month 16, by its minimum payments alone. The avalanche targets the 29.9% credit card first and costs $357.28 less in interest; both finish in 36 months.
When the order does not matter
When every debt is at 0%, no interest is charged, so the order cannot change the total cost or the payoff date. For example, three hypothetical debts, Debt 1: $1,500 at 0%, $50 minimum; Debt 2: $3,000 at 0%, $100 minimum; and Debt 3: $4,500 at 0%, $150 minimum, a total of $9,000 paid with $500 a month, take 18 months and $0.00 in interest with either method. The calculator’s verdict is “Same result either way.”
Special cases worth a closer look
- Promotional rates. A 0% or low promo rate that ends partway through the plan will rise. The calculator uses one fixed rate per debt, so you may want to rerun it when the promo ends.
- Deferred interest. Some store financing charges interest back to the start if the balance is not cleared by the end of the promo. That can make paying such a balance before the deadline more urgent than its listed rate suggests.
- Secured loans. Falling behind on a loan secured by a car or home can mean losing it. That does not change the payoff order, but it is a reason to keep those payments current first.
- Debts with special terms. Some loans, such as certain student loans, may offer payment options or protections that others do not. Check the terms before deciding to pay one off early.
For what to do if the minimums on your list add up to more than you can pay, see when minimum payments don’t fit your budget.
Keep the list up to date
Balances, minimums, and sometimes rates change. Updating your list every few months, or whenever something changes, keeps the order and the payoff dates accurate. If a new debt is added, it joins the list in its place by balance or rate.
Common questions
Should I include my mortgage in the list?
That is up to you. Some people leave out a mortgage because it is large and long-term, and focus on shorter debts. The calculator works either way.
What if I do not know a debt’s APR?
Check your latest statement or loan agreement, or ask the lender. Without the rate, the avalanche order and the interest estimates will not be accurate.
The takeaway
List every debt with its balance, APR, and minimum payment, and note anything unusual such as a promo rate, deferred interest, or a secured loan. The snowball sorts by balance and the avalanche by rate. Keep the list up to date, and when every rate is 0%, the order does not change the cost.
This guide is educational only and is not financial, tax, or legal advice. The example uses hypothetical numbers; your lender or card issuer sets your actual terms. See how our calculators work.
Some pages on SmartCashLab may include affiliate links, and if you use one we may earn a commission at no extra cost to you; this guide contains no affiliate links, and compensation never changes our calculator results. Read our affiliate disclosure.