Method & assumptions

How DebtPathway works

By Mike Mulik · Published June 25, 2026 · Updated July 26, 2026

I design digital products and build free tools. Not a financial advisor, what that means.

No black box. Here is exactly how the calculator turns your balances into a payoff date and an interest total.

One abbreviation first, because it's used throughout this page. APR stands for annual percentage rate. It is the yearly interest rate on a debt, the number your lender quotes you. A 22% APR means that, over a year, you're charged roughly 22% of what you owe in interest.

The monthly loop

For every month, in order, the calculator:

• Adds interest. Each debt's balance grows by its monthly rate, which is your APR divided by 12. A 24% APR adds 2% to that balance that month.
• Pays the minimums. Every debt gets at least its minimum payment (or its remaining balance, if that's smaller).
• Attacks one target. Whatever money is left, meaning your extra payment plus any minimums freed up by debts already paid off, goes entirely to the current target debt. Avalanche targets the highest APR; snowball targets the smallest balance. See the full snowball vs. avalanche comparison.
• Rolls over. When a debt hits zero, the total you pay each month doesn't drop, it shifts to the next debt. This is what makes the plan speed up over time.

It repeats until every balance is zero, counting the months and adding up the interest along the way. Amounts are rounded to the cent each month, the way a real statement works.

The formula

There is really only one formula. Each month, every open debt accrues interest on its current balance:

monthly interest = balance × (APR ÷ 100 ÷ 12)
new balance = balance + monthly interest − payment

So a 22% APR becomes a monthly rate of 22 ÷ 12 = 1.8333%. That's it. Everything else the calculator reports (your payoff date, your total interest, the chart) falls out of repeating those two lines once a month, until every balance reaches zero.

You may have seen the classic amortization formula that loan calculators use to turn a balance and a term into a fixed monthly payment. This calculator does the opposite: you supply the payment, and it discovers the term by stepping forward month by month. That's deliberate. Once you add the rollover, the payment going to any single debt changes every time another debt is cleared, and no single tidy equation covers that. Simulating the months is both simpler and more honest.

For one debt with one fixed payment and no rollover, the closed form does apply, and it agrees with this calculator: n = −log(1 − (r × B) ÷ P) ÷ log(1 + r), where B is the balance, P the monthly payment, and r the monthly rate. For the example below it gives 25.1 months, which rounds up to the 26 the calculator shows.

A worked example you can check by hand

Take a single $10,000 balance at 22% APR, paying a flat $500 a month. The monthly rate is 1.8333%. Here are the first four months, so you can grab a calculator and follow along:

Month 1: $10,000 × 1.8333% = $183.33 of interest, giving $10,183.33; subtract your $500 and you owe $9,683.33. Notice that only $316.67 of that $500 actually reduced what you owe. Month 2 starts from the new, slightly smaller balance, so the interest is a little lower, and a little more of your payment reaches what you borrowed. That shift is the whole reason paying extra works so well early on.

Carried all the way out, this debt is gone in 26 months, with $2,571.43 of total interest and $12,571.43 paid in all. With several debts the calculator runs this same loop on each one, then routes every spare dollar to whichever debt your chosen method targets first.

Amounts are rounded to the cent at each step, exactly as shown above, so your hand arithmetic should match the calculator penny for penny. If it doesn't, I'd genuinely like to know: tell me.

What this calculator was checked against

The payoff math lives in one small, self-contained file, and it's covered by an automated test suite that runs every time the site is built. Those tests check the things that would matter to you if they were wrong:

• A single loan finishes within one month of the standard closed-form amortization formula (the same formula shown above). For the $10,000 example, the formula gives 25.1 months and the calculator says 26.
• The totals reconcile: what you borrowed plus all the interest charged always equals the total paid.
• Avalanche never comes out more expensive than snowball, which is a property the math guarantees.
• Adding an extra payment always makes the plan finish sooner and cost less, never the reverse.
• A budget too small to cover the interest is reported as having no payoff date, instead of returning a wrong one.

What that does not mean is that your lender will agree to the penny. Real statements vary in when they post interest, how they treat partial months, and how they round. Treat the output as a close, honest projection for planning, not as a quote from your lender.

Assumptions

• Your APR is fixed for the life of the payoff.
• You pay the same total every month and never miss a payment. (The total is your minimums plus your extra.)
• Minimum payments are treated as fixed dollar amounts, not a shrinking percentage of the balance. Real card minimums often fall as the balance drops, which would slightly slow a minimum-only payoff. So a minimum-only plan in real life can be even slower than shown here.
• No new charges are added to any debt.
• Fees, promotional rates, and taxes aren't modeled.

When a plan “never pays off”

If your total monthly payment is smaller than the interest piling on across all your debts, the balance can only grow, so there's no payoff date to show. When that happens, the calculator tells you instead of inventing a number. Adding to your monthly payment, or lowering a rate, fixes it.

Your privacy

Everything above happens in your browser. Your balances and rates are never sent to a server, never stored, and never shared. Close the tab and they're gone.

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