Debt Payoff Calculator for India
Kedil's debt payoff calculator helps salaried Indians decide which loan to close first when several EMIs compete for one salary. Enter each balance, interest rate and minimum payment, then compare the avalanche method against the snowball method — built for Indian rates, where credit cards run past 40% a year and personal loans sit near 16%.
What your result means
Two numbers matter on the result above: your debt-free date, and the total interest you will pay to reach it.
The gap between the two methods is usually smaller than people expect — often a few thousand rupees, not a few lakh. That is worth knowing before you agonise over the choice. What moves your date meaningfully is the extra amount you put in each month, not which order you pay.
If both methods land on the same month, pick the one you will actually stick to. A plan you abandon in month four costs far more than the wrong ordering ever will.
How we calculate this
We use two named methods, and run both on your numbers at the same time.
The debt avalanche method pays every minimum, then sends every spare rupee to the debt with the highest interest rate. It is the mathematically cheapest route.
The debt snowball method pays every minimum, then sends every spare rupee to the smallest balance. It clears individual loans sooner, which is easier to sustain.
Interest this month = Outstanding balance × (Annual rate ÷ 12) New balance = Outstanding balance + Interest − Payment made Payment made = Minimum due + (Extra amount, if this is the target debt)
- Outstanding balance
- What you owe today, not the original loan amount.
- Annual rate
- The rate on your statement. For credit cards, multiply the monthly rate by 12.
- Minimum due
- For cards, the RBI's December 2022 formula sets this as the higher of all interest, fees and taxes, or 5% of total dues, plus any past-due and EMI amounts.
- Extra amount
- Whatever you can add beyond the minimums. This is the only input you control.
When a debt closes, its minimum payment rolls into the next target. That rolling amount is what makes both methods accelerate.
Assumptions
The calculator uses the rates you enter. Where you are estimating, these are the current Indian ranges, all checked 5 September 2026.
Limits: the calculator assumes your rates stay fixed and you make every payment on time. It does not model late fees, GST on interest, or a new loan taken mid-plan.
An example
Ravi is 34, works in Chennai, take-home ₹95,000. He has four debts.
After EMIs, rent and household costs, Ravi finds ₹12,000 a month spare. Avalanche sends that ₹12,000 to the HDFC card first — highest rate. Debt-free in 29 months, paying ₹1,78,821 in interest. Snowball sends it to the Axis card first — smallest balance. Debt-free in 29 months, paying ₹1,86,267 in interest.
Same month. A difference of ₹7,446 — about one month of his spare cash. The real lesson sits elsewhere. Ravi's ₹12,000 is doing the heavy lifting. Had he paid only the minimums, the HDFC card alone would have taken over 21 years to clear.
What changes the result
Your extra monthly amount
This is the single biggest lever, and it is not close. Doubling your spare amount roughly halves your timeline; the choice between snowball and avalanche moves it by a rounding error. If you are deciding where to spend your attention, spend it on finding another ₹5,000 a month rather than on re-ordering your debts.
The spread between your interest rates
Avalanche only wins by a meaningful margin when your rates are far apart. A 42% credit card sitting beside a 9.5% car loan is a wide spread — that is where paying the card first genuinely saves money. If every debt you hold sits between 14% and 16%, the two methods produce nearly identical results and you should simply pick the one you will follow.
Whether the debt is secured or unsecured
The maths treats every debt the same. Real life does not. A car loan or a gold loan is backed by something the lender can take, and a home loan carries tax relief the others do not. Most Indian borrowers clear unsecured debt — cards, personal loans, loan-app borrowing — before touching secured debt, even when a strict rate ordering would say otherwise.
Foreclosure charges on fixed-rate loans
Closing a loan early sometimes costs money. Since 1 January 2026, RBI rules bar lenders from charging prepayment fees on floating-rate loans taken by individuals for non-business purposes. Fixed-rate personal loans are not covered — those can still carry a foreclosure charge set by the lender. Check your agreement before making a lump-sum payment.
What people get wrong
How to use
- 1Add each debt — name, outstanding balance, interest rate, and monthly minimum payment.
- 2Enter take-home pay, needs (excluding EMIs), and wants to see your budget split.
- 3Pick snowball or avalanche and compare which clears debt faster.
- 4Schedule lump-sum prepayments from bonuses or tax refunds.
- 5Review the payoff timeline and total interest saved.
Frequently asked questions
What is better, debt snowball or debt avalanche?
Avalanche costs less because it clears your highest-rate debt first. Snowball closes individual loans sooner, which is easier to keep up. On most Indian debt stacks the difference is a few thousand rupees. If avalanche saves you very little, choose snowball — the method you finish beats the method that is theoretically cheaper.
How do I calculate debt avalanche?
List every debt with its interest rate. Pay the minimum on all of them. Send every spare rupee to the highest-rate debt until it clears, then roll that entire payment into the next-highest. Repeat. The calculator above runs this month by month on your actual balances.
How do I calculate a debt snowball?
Same method, different ordering. Pay all minimums, then target the smallest balance regardless of its rate. When it closes, add its payment to the next-smallest. Each closure frees up more cash, so the pace builds. The calculator shows both orderings side by side.
Which loan should I pay off first in India — credit card or personal loan?
Almost always the credit card. Indian cards run up to 45% a year against roughly 10–24% on a bank personal loan. That spread is wide enough that avalanche gives a clear answer. Clear unsecured debt before secured debt like car or gold loans.
Does Dave Ramsey recommend snowball or avalanche?
Snowball — his argument is behavioural, that early wins keep people going. It is sound reasoning, built on US interest rates in the high teens. With Indian cards near 42%, the cost of ignoring rate order is larger here, so run both before deciding.
Should I take a personal loan to close my credit card dues?
Sometimes. Moving a 42% card balance onto a 14% personal loan cuts your interest sharply. It only works if you stop using the card — otherwise you hold both. Check the processing fee and any foreclosure charge on the new loan first.
Will paying off debt early cost me a penalty in 2026?
Not on floating-rate loans. Since 1 January 2026, RBI rules bar prepayment charges on floating-rate loans taken by individuals for non-business purposes. Fixed-rate personal loans are excluded and may still carry a foreclosure fee — check your loan agreement before paying a lump sum.
What is not modelled?
Late fees, GST on interest, bounce charges, rate resets, and inflation. The calculator assumes your rates stay fixed and you make every payment on time. If your lender charges a foreclosure fee on a fixed-rate loan, subtract that from the interest you think you are saving.
Last updated 5 September 2026 · Formula sources: RBI Pre-payment Charges on Loans Directions, 2025 · RBI minimum amount due formula, effective December 2022