Debt Payoff Calculator: Avalanche, Snowball, or Invest Instead?
If you have extra money each month and more than one debt, you have three real options: attack the highest-rate debt first (avalanche), attack the smallest balance first (snowball), or pay only the minimums and invest the extra. Most calculators compare the first two. This one compares all three — because for cheap debt, investing is often the mathematically correct answer, and pretending it isn’t doesn’t help you.
Every path in this calculator spends the same total budget each month — your combined minimums plus your extra. When a debt is paid off, its freed-up minimum rolls forward into the strategy (or into investing). All three paths are then measured at the same finish line: the month the slowest path is debt-free. Since every path ends with zero debt, the ending investment balance is the honest scoreboard.
What the numbers mean
Debt-free date and total interest per strategy — avalanche always pays the least interest; the calculator shows exactly how much snowball’s quick-wins ordering costs you.
Ending investment balance — the money each path has invested by the common finish line. Interest saved by aggressive payoff shows up here automatically as more months of investing your full budget.
The winner — whichever path ends richest at the same date, on the same budget.
What Makes cinder.fi Different
Seeded from your real accounts: the in-app planner pre-fills your actual loan balances, rates, and payments from the loan ledger — you just add credit cards and pick your extra amount.
Score impact: cinder.fi’s capital allocation engine models what eliminating each debt does to your retirement projection and Cinder Score — not just the interest math.
Whole-plan trade-offs: the same extra $500/month could prepay debt, fill TFSA room, or catch up RRSP contributions. cinder.fi ranks your options with real tax treatment for your bracket and province.
Compare each debt's interest rate to your realistic after-tax expected return. Paying off a 20% credit card is a guaranteed 20% return — nothing in the market reliably beats that, so high-interest debt comes first. A 3% car loan or student loan is cheaper than the long-run return of a diversified portfolio, so investing usually wins there. Debts in the 5-7% zone are genuinely close, and tax shelter (TFSA/RRSP room) tips the scale toward investing.
›What's the difference between debt avalanche and debt snowball?
Avalanche puts every extra dollar toward the highest-rate debt first, which mathematically minimizes total interest. Snowball targets the smallest balance first for quick psychological wins. Snowball costs somewhat more interest but has better real-world completion rates for people motivated by visible progress. The calculator shows the actual dollar gap for your debts — often smaller than people expect.
›A HELOC at 6% vs an RRSP earning 7% expected — which wins?
Closer than it looks. The HELOC payoff is a guaranteed 6%; the RRSP's 7% is an expectation with real variance. But an RRSP contribution also triggers a tax deduction at your marginal rate — at 35%, a $1,000 contribution costs you $650 net, which materially boosts the effective return. For most people with available RRSP room and a marginal rate above ~30%, the RRSP wins; without the deduction (already-maxed room, or a TFSA instead), the guaranteed 6% payoff is very hard to beat.
›Do minimum payments roll over when a debt is paid off?
In this calculator, yes — that's the realistic assumption. When one debt dies, its minimum payment joins your extra budget attacking the next debt (or, in the investing path, gets invested). Keeping your total monthly budget constant across every strategy is what makes the three end-states honestly comparable.