Use a free Debt Reduction Calculator to help you eliminate your credit card, auto, student loan, and other debts. Easily create a debt reduction calculator schedule based on the popular debt snowball strategy using this free spreadsheet.
The first worksheet is a simple debt reduction calculator where you enter your information, choose your total monthly payment, and see a summary of the results based on the strategy you choose.
The second worksheet is a payment schedule designed for you to print so you can keep track of your progress. You can also see how the snowball increases as you pay off your debts.
Using the Debt Reduction Calculator here
This is how the spreadsheet works:
First, enter abbreviated names for your the credit card or lending institution, the current balances, and the interest rate information for all of your current debts (including home equity lines of credit or second mortgages).
Next, enter the minimum payment you will make each month for each debt. You may need to verify with your lending institutions what your current minimum payments are. Also, keep in mind that your minimum payment may change over time, depending on interest rates or other issues.
Then, choose the maximum monthly payment that you can pay each month towards your debts, based on your home budget. The difference between the total minimum payments and your total monthly payment is your initial snowball. This initial snowball, or "extra payment", will be applied to the first debt, depending on your chosen strategy.
When your first debt is completely paid, the remainder of your snowball is then applied to the NEXT debt, and so on, until all the debts are paid.
Debt Reduction Strategies
The sections describe the different strategies that you can choose within the debt reduction calculator spreadsheet. You may also want to see a Credit Card Payoff Calculator for more information.
Unless you choose the "No Snowball" option, ALL of these strategies make use of the snowball "effect" where after you pay off your first debt you roll that payment into helping pay off the next one.
Debt Snowball (Lowest Balance First):
This method is the official debt snowball strategy. The benefit of this method is the psychological effect of seeing the number of debts disappear quickly.
Highest Interest First:
This strategy results in the lowest total interest, but depending on the balance of your higher interest loans, it may take you longer to see your first loan/debt completely paid off. If the difference in the total interest is not significant, than you may get more satisfaction and success from the Lowest Balance First method.
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