Debt Payoff Calculator: Avalanche, Snowball, or Invest Instead?
If you have extra money each month and more than one debt, you have three 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 often wins on the math.
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 fair measure.
What the numbers mean
Debt-free date and total interest per strategy: avalanche always pays the least interest, and the calculator shows how much snowball’s 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 as more months of investing your full budget.
The winner: whichever path ends with the most money at the same date, on the same budget.
What cinder.fi Adds
Starts from your real accounts: the in-app planner pre-fills your loan balances, rates, and payments from the loan ledger. You 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.
Whole-plan trade-offs: the same extra $500/month could prepay debt, fill TFSA room, or catch up on RRSP contributions. cinder.fi ranks the options using the 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, and nothing in the market reliably beats that, so high-interest debt comes first. A 3% car loan or student loan costs less than the long-run return of a diversified portfolio, so investing usually wins there. Debts in the 5-7% zone are 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 dollar gap for your debts, which is often smaller than people expect.
›A HELOC at 6% vs an RRSP earning 7% expected — which wins?
It's 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 raises the effective return a lot. For most people with available RRSP room and a marginal rate above ~30%, the RRSP wins. Without the deduction (maxed room, or a TFSA instead), the guaranteed 6% payoff is hard to beat.
›Do minimum payments roll over when a debt is paid off?
Yes, because that is what happens in real life. When one debt is paid off, its minimum payment joins your extra budget for 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 comparable.