Understanding the calculation
Each month, nominal annual interest divided by 12 is added to balances. Fixed minimums are paid first, capped at the amount due; the remainder goes to the smallest balance for snowball or highest interest for avalanche. Money left after paying off a debt moves to the next debt that month. Freed minimums remain available in later months. The table shows balances, interest and payments for both methods.
Monthly interest = balance × annual rate / 1,200. New balance = balance + interest − payment. Freed budget is reused.
Worked example
Fictional EUR example: debts of 600 and 400, zero interest, minimums of 50 each and total budget 200. Both methods finish in five months and pay 1,000 with no interest. Snowball pays the 400 debt first. A budget of 80 would not cover the initial 100 minimums.
Assumptions and limits
Rates and minimums stay fixed, with no fees, new purchases or daily payments. The limit is 1,200 months. Remaining debt is not reported as paid, nor does it alone prove perpetual impossibility. Positive debt with zero budget cannot be repaid. No bank connection; sharing reveals names and figures.
Questions about this tool
Does the budget stay the same after a debt is paid?
Yes. Freed money goes to the remaining debts without reducing the total budget.