Debt Avalanche Calculator Canada — Tax Year 2025
Pay off multiple debts in the mathematically optimal order to minimise interest. For Canada. Uses current Tax Year 2025 data.
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How much extra you can throw at debt each month beyond minimums
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E.g. Credit card
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E.g. Personal loan
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Common questions — Canada
Avalanche vs snowball — which is better?
Mathematically, avalanche (highest rate first) always costs less interest. Psychologically, snowball (smallest balance first) gives faster wins and better motivation for some people. Research suggests snowball leads to more people successfully completing debt payoff. Choose based on your personality, not just the math.
What if I can't afford even minimum payments?
Contact lenders immediately. Most banks have hardship programs. Credit cards may temporarily reduce minimum payments. For serious situations, a debt management plan through a non-profit credit counselling agency (rare in India) or debt consolidation loan may help. Avoid payday lenders — they compound the problem.
Should I stop investing while using the avalanche method?
Keep investing enough for employer 401k/EPF match (free money). Then aggressively pay high-interest debt. For debt above 10–12% rate: pay down before investing extra. For debt below 8% (home loan): investing alongside is often rational given better long-term returns from equity.
What is a "debt roll-up" or "debt stacking"?
These are marketing terms for the avalanche method. Once you pay off the highest-rate debt, you take what you were paying on it and add it to the next debt's payments. Your total payment stays the same but each debt gets extinguished faster as previous minimums are "rolled up" into the next attack.
Does making extra payments hurt my credit score?
Paying off debt improves your credit score over time by reducing utilisation ratio and improving debt-to-income ratio. Paying more than the minimum never hurts your score. Only closing the account after payoff might slightly reduce score (average account age drops) — but the financial benefit of being debt-free far outweighs any temporary score dip.