What is the Debt payoff module for?
It calculates your debt free date and total interest based on a fixed monthly payment. It compares two strategies: avalanche, which targets the highest interest rate, and snowball, which targets the smallest balance. The goal is to see the difference in total cost between the two methods.
How do I add a debt to the calculator?
- Open Calculators and press Debt payoff.
- If a debt exists in Debt Planner or Loans, press Add from your books to copy its details.
- For unrecorded debts, enter the name, Balance, and annual Rate.
- Press Add another debt for each additional debt you have.
- Enter the total amount you can pay each month in the Total you can pay each month field.
How do I compare snowball and avalanche?
- Press Snowball under Order to target the smallest balance first.
- Press Avalanche to target the highest interest rate first.
- Watch the Interest you will pay figure change as you switch strategies.
- Read the note at the bottom if the unpicked strategy would cost less.
What happens if my budget is too low?
If your monthly amount is below the total of all minimum payments, the calculator will not show a date. It will tell you the minimum figure you need to reach. This is not an error; it means your budget cannot cover the required minimums. Raise the monthly amount or reduce a debt to see the date again.
What this does to your books
Nothing on this screen posts and nothing is saved, so there is no debit and no credit to show. Reading a balance from Debt Planner or Loans only makes an editable copy for this calculation.