Debt Payoff Calculator

What is the avalanche method?

The avalanche method means you pay the minimum required on all your debts every month, then throw any extra money at the debt with the highest interest rate. Once that debt is cleared, the extra (and the freed-up minimum) all rolls onto the next highest-rate debt. It is mathematically optimal — it minimises the total interest you pay over the full payoff period. The downside is that your highest-rate debt may also be your largest, so it can take months before you see the first debt disappear.

What is the snowball method?

The snowball method works the same way, except you target the smallest balance first instead of the highest rate. You get a quick win — seeing a debt disappear entirely — which builds psychological momentum. Research (including studies by Kellogg School of Management) suggests that many people actually pay off debt faster with snowball because the early wins keep them motivated. The trade-off: you usually pay more total interest than with avalanche, because you're not prioritising the most expensive debt.

Which method is better for South Africa?

Mathematically, avalanche almost always wins on total interest, especially in SA where credit card rates (20–22%) are dramatically higher than vehicle finance rates (13–16%). If your highest-rate debt is also your smallest balance, the two strategies produce nearly identical results. Choose avalanche if you're data-driven and can stay disciplined. Choose snowball if you've tried paying off debt before and given up — the early wins matter more than the interest difference.

What SA interest rates should I use?

As of May 2026 with prime at 10.25%: credit cards typically 20–22% p.a. (NCA cap is repo + 14% = 20.75%); personal loans 17–22% p.a. (NCA cap repo + 21% = 27.75%); retail/store cards 20.75% p.a. (NCA cap); vehicle finance 13–16% p.a. (prime + 3–6%); home loans 10.25–12.25% p.a. (prime + 0–2%). Check your latest statement — the interest rate (or APR) must be disclosed. The calculator's quick-fill presets use mid-range estimates for each category.

What counts as a minimum payment?

Your minimum payment is the lowest amount your lender requires you to pay each month to avoid penalties or default. For credit cards in SA, this is typically 3–5% of the outstanding balance or R50 (whichever is greater). For personal loans and vehicle finance it's a fixed monthly instalment. For revolving credit facilities, check your statement — the minimum is shown explicitly. Paying only minimums on a 22% credit card can take 10–15 years to clear the balance and cost 2–3× the original debt in interest alone.

How do I find extra money to throw at my debt?

Even R200–R500/month extra makes a meaningful difference on high-rate debt — try the slider to see. Common SA sources of extra debt payments: skipping takeaways or subscriptions you don't use; selling unused items; applying a bonus, 13th cheque, or tax refund directly to the highest-rate debt (lump-sum prepayments are usually allowed under the NCA for personal loans and credit cards); switching to a lower-rate product (e.g. consolidating credit card debt into a personal loan at a lower rate, then clearing the personal loan with the avalanche method).

Can I prepay a personal loan or vehicle finance in South Africa?

Yes — the National Credit Act (NCA) gives you the right to settle any credit agreement early at any time. For personal loans and credit cards there is no prepayment penalty. For vehicle finance, some agreements include an early-settlement fee (typically one month's interest), but this is usually still less than the interest you'd pay by continuing on schedule. Always request a settlement letter from your lender to get the exact amount — it will be slightly less than your outstanding balance because of how interest accrues.

Should I pay off debt before saving for retirement?

It depends on the rates. If your debt costs 20–22% p.a. (credit card), paying it off is almost always better than any savings product — no investment reliably returns 22% after fees. For lower-rate debt (vehicle finance at 14%, home loan at 10.5%), it's a trade-off: if your employer offers pension fund matching, take the match first (it's an instant 50–100% return). Then use any surplus to split between debt repayment and a TFSA, where growth is tax-free. A rough rule: pay off anything above prime + 7% before saving aggressively.