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    Personal Finance

    Debt Payoff Simulator

    Compares avalanche (highest-interest-first) and snowball (smallest-balance-first) debt repayment strategies. Calculates total interest paid under each method, projected payoff dates, and the amount saved by choosing the optimal approach.

    Personal - Debt Payoff Simulator.xlsx

    Excel (.xlsx) — No macros — Works in Excel, Google Sheets, LibreOffice

    Download Free

    What This Spreadsheet Solves

    • Uncertainty about which debts to prioritize
    • No visibility into total interest cost over the life of all debts
    • Unclear payoff timeline when making minimum payments only
    • Difficulty quantifying the benefit of extra monthly payments
    • No side-by-side comparison of repayment strategies

    Who This Is For

    • Individuals carrying multiple debts (credit cards, loans, lines of credit)
    • Financial advisors building repayment plans for clients
    • Couples consolidating and strategizing joint debt payoff
    • Recent graduates managing student loan repayment

    Inputs

    • textDebt Name
    • $Current Balance
    • %Interest Rate (APR)
    • $Minimum Payment
    • $Extra Monthly Payment Available

    Outputs

    • Payoff date under avalanche method
    • Payoff date under snowball method
    • Total interest paid per method
    • Interest saved by choosing optimal method
    • Month-by-month amortization per debt

    How Calculations Work

    The simulator takes all debt balances, interest rates, and minimum payments, then models two repayment schedules. In the avalanche method, extra payments are directed to the highest-rate debt first. In the snowball method, extra payments target the smallest balance first. Each month, interest accrues on remaining balances, payments are applied, and freed-up minimums roll into the next target debt. The model iterates until all debts reach zero.

    Example Use Case

    Scenario: Three debts: credit card ($4,200 at 22.9%, $120 min), auto loan ($11,500 at 6.5%, $310 min), personal loan ($3,100 at 12%, $95 min). Extra payment available: $200/month.

    Result: Avalanche method pays off all debt in 29 months with $2,410 total interest. Snowball method takes 31 months with $2,780 total interest. Choosing avalanche saves $370 in interest and finishes 2 months earlier.

    What You Get — 5 Sheets

    READMEOverview of avalanche vs snowball methods, instructions for entering debt details, and explanation of amortization output.
    INPUTTable for entering each debt's name, balance, APR, and minimum payment, plus the total extra monthly payment amount.
    LOGICIterative amortization engine that applies interest, allocates payments by strategy, and cascades freed minimums to the next target debt.
    OUTPUTSide-by-side comparison of both methods showing payoff timeline, total interest, monthly schedules, and interest savings differential.
    CONFIGSettings for compounding frequency, rounding rules, and optional debt consolidation interest rate for comparison.

    Technical Details

    File Format:.xlsx (Open XML)
    Macros:None — pure formulas
    Compatibility:Excel 2016+, Google Sheets, LibreOffice
    Input Cells:Clearly marked with blue background
    Formulas:All outputs are live Excel formulas
    Protection:LOGIC sheet formulas protected, INPUT cells editable

    Frequently Asked Questions

    Which method is always cheaper?

    Avalanche (highest interest first) always minimizes total interest paid. Snowball can provide faster psychological wins by eliminating small balances sooner, but costs more in interest.

    Can I model adding a lump-sum payment?

    Yes. Add a one-time extra payment in the INPUT sheet for a specific month. The LOGIC sheet will apply it to the target debt in that period.

    What if my minimum payments change over time?

    Some lenders reduce minimums as balances drop. You can set a fixed minimum in CONFIG to simulate keeping payments constant, which accelerates payoff.

    Does this handle 0% promotional rates?

    Enter 0% as the APR. The model will correctly deprioritize that debt under avalanche. Set a reminder in CONFIG for when the promotional rate expires.

    How accurate are the payoff dates?

    Dates assume consistent monthly payments and no new charges. Adding to balances or missing payments will shift the timeline. Re-run the model quarterly for accuracy.

    Download Debt Payoff Simulator

    Ready to use immediately. Enter your data in the INPUT sheet, see results in OUTPUT.

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