Calculate how quickly you can pay off debt with extra monthly payments. Compare minimum payments vs aggressive payoff for any Australian loan or credit card.
| Strategy | Payoff | Total interest |
|---|
The calculator above shows how quickly you can become debt-free with different payment levels. Two main strategies for paying off multiple debts are the debt avalanche and debt snowball — both work, but they optimise for different outcomes.
| Feature | Debt Avalanche | Debt Snowball |
|---|---|---|
| Attack order | Highest interest rate first | Smallest balance first |
| Total interest paid | Minimum — mathematically optimal | Slightly more than avalanche |
| Time to first debt cleared | Longer (if high-rate debt is large) | Shorter psychological win |
| Best for | People motivated by numbers and efficiency | People who need momentum and quick wins |
| Debt | Balance | Rate | Min Payment |
|---|---|---|---|
| Credit card | $8,000 | 19.99% | $160 |
| Personal loan | $12,000 | 11% | $280 |
| Car loan | $15,000 | 8% | $320 |
Total monthly minimum: $760. If you increase payments to $1,000/month (+$240):
The most powerful debt payoff technique is the "rolldown" — when one debt is fully paid off, take the entire payment you were making (minimum + extra) and add it to the next debt. You never reduce your total monthly payment; you just concentrate it on fewer and fewer debts. Each payoff accelerates the next one.
What is the fastest way to pay off debt in Australia?
Mathematically, the debt avalanche — paying minimums on all debts while directing extra money to the highest-rate debt — minimises total interest and gets you debt-free fastest at lowest total cost. For credit card debt at 20%, every extra dollar reduces the balance that is costing you 20% per year.
What is the debt snowball method?
Pay minimums on all debts except the smallest balance, which you attack with every extra dollar you can find. When the smallest debt is cleared, roll the full payment to the next smallest. The psychological benefit of clearing accounts quickly helps many people stay motivated — research shows behaviour and consistency often matter more than mathematical optimality.
Should I pay off debt or invest?
Generally, pay off high-rate debt (credit cards at 20%+) before investing — no investment reliably returns 20%+ per year. For lower-rate debt (mortgage at 6.5%, student loan indexed at 3.2%), the answer depends on your expected investment return. Mortgage debt at 6.5% is a guaranteed 6.5% return to pay it off; share market returns average 9-10% long-run but with volatility.
What if I cannot afford minimum payments?
Contact your lenders immediately and ask about financial hardship arrangements — most Australian banks and credit providers are legally required to consider genuine hardship applications under the National Credit Code. The National Debt Helpline (1800 007 007) provides free financial counselling and can help negotiate with creditors.