# Debt payoff calculator: avalanche and snowball documentation

Inputs, formulas, assumptions and API/MCP examples for the debt payoff calculator: avalanche and snowball. Reproduce a calculation and cite its sources.

Canonical calculator: https://klarfort.com/tools/debt-payoff-calculator/
Content updated: 2026-09-07
Assumptions reviewed: 2026-09-07

## Overview
Estimate when several debts could be cleared using a fixed monthly payment budget. Compare avalanche, which prioritizes the highest current rate, with snowball, which prioritizes the smallest balance, and an entered consolidation loan.

Add promotional expiry dates, minimum-payment rules and transfer fees for each debt. Cash above your protected emergency amount can reduce the opening debt before monthly payments begin.

## How to use
1. Add each debt balance, standard rate and minimum-payment rule. Enter promotion and transfer-fee details only when they apply.
2. Set the starting month, total monthly debt budget and maximum projection period.
3. Enter available cash and the emergency amount to keep, then add consolidation terms for that comparison.
4. Choose a strategy and calculate. Compare payoff months, interest, fees and any minimum-payment shortfall.

## Understanding the result
Debt-free month is the first month every modeled balance is cleared. When a debt is paid off, the same total monthly budget becomes available for the remaining debts.

An unavailable payoff month can mean the budget fails to cover required minimums or the debt remains at the end of the chosen horizon. Check the shortfall and remaining balance to distinguish these cases.

## Questions
### How do avalanche and snowball allocate extra money?
Both pay the entered minimums first. Avalanche sends the remaining budget to the highest current interest rate, while snowball starts with the smallest remaining balance. Ties keep the order in which debts were entered.

### When does a promotional interest rate expire?
The standard rate applies from the beginning of the entered expiry month. Leave the expiry field empty when there is no promotion. The model recalculates avalanche priorities as rates change.

### What happens to the emergency cash amount?
Only available cash above that floor is used for initial repayment. The reserve is not replenished by the calculator, and the model does not add delinquency fees when the monthly budget is insufficient.

## Default worked example
Debt-free month: 20 months. Debt-free month under the entered rates, minimum payments and cash floor. Assumptions as of 2026-09-07.

## Formula
Monthly balance = prior balance + interest - minimum payment - allocated surplus.

- Promotions end at the beginning of the expiry month. Monthly APR/12 interest is charged before payments.
- Percent minimums apply to the balance including current interest; interest-plus-percent uses interest plus the opening principal percentage; each has an entered cash floor.
- The fixed monthly budget rolls freed payments into the next debt. Rate or balance ties retain input order.
- Transfer fees are capitalized once at the start; consolidation adds its separate fee and contractual amortizing minimum.
- Only cash above the emergency floor repays debt immediately. Insufficient minimum-payment budgets are reported without simulating delinquency fees.
- Consolidation represents one new loan; no eligibility, credit score, tax or legal consequences are modeled.

## Inputs
- currency: Currency; default "USD"
- debts: Balances and entered minimum formulas; promotion ends at the start of its YYYY-MM expiry month.; default [{"balance":5000,"annualRate":18,"promoRate":0,"promoEndMonth":"","minimumType":"fixed","minimumPayment":100,"minimumPercent":2,"transferFeePercent":0},{"balance":2000,"annualRate":12,"promoRate":0,"promoEndMonth":"","minimumType":"fixed","minimumPayment":50,"minimumPercent":2,"transferFeePercent":0}]
- strategy: Payoff strategy; default "avalanche"
- startMonth: Projection start month; default "2026-09"
- monthlyBudget: Total monthly debt-payment budget; default 400
- availableCash: Cash available before protecting reserve; default 0
- emergencyCashFloor: Protected emergency cash; default 0
- maxMonths: Maximum projection months; default 600
- consolidationRate: Consolidation annual rate (%); default 8
- consolidationMonths: Consolidation contractual months; default 36
- consolidationFeePercent: Additional financed consolidation fee (%); default 0

## Interfaces
Input schema: https://klarfort.com/tools/debt-payoff-calculator/schema.json
Worked request and response: https://klarfort.com/tools/debt-payoff-calculator/examples.json
Public table: https://klarfort.com/tools/debt-payoff-calculator/table.json
JSON API: POST https://klarfort.com/tools/api/v1/debt-payoff-calculator
MCP endpoint: POST https://klarfort.com/tools/mcp
MCP tool name: debt-payoff-calculator

## JSON request body
```json
{
  "currency": "USD",
  "debts": [
    {
      "balance": 5000,
      "annualRate": 18,
      "promoRate": 0,
      "promoEndMonth": "",
      "minimumType": "fixed",
      "minimumPayment": 100,
      "minimumPercent": 2,
      "transferFeePercent": 0
    },
    {
      "balance": 2000,
      "annualRate": 12,
      "promoRate": 0,
      "promoEndMonth": "",
      "minimumType": "fixed",
      "minimumPayment": 50,
      "minimumPercent": 2,
      "transferFeePercent": 0
    }
  ],
  "strategy": "avalanche",
  "startMonth": "2026-09",
  "monthlyBudget": 400,
  "availableCash": 0,
  "emergencyCashFloor": 0,
  "maxMonths": 600,
  "consolidationRate": 8,
  "consolidationMonths": 36,
  "consolidationFeePercent": 0
}
```

## Usage and credit
Free for personal, commercial and any other lawful use with credit to KlarFort at https://klarfort.com/. Third-party data terms still apply.

Computed with KlarFort Calculators, https://klarfort.com/

Place a visible credit near the reused material or in the credits for your work or integration. One clear credit per work or integration is sufficient; no separate credit per API request is required. The credit_url field contains the homepage. The citation_url field is an optional calculator reference. Full permission: https://klarfort.com/tools/docs/license/

## Sources
KlarFort calculator methodology: https://klarfort.com/tools/methodology/ (1)