How to use this planner
Add one row per debt. For each one you need:
- Balance: the outstanding principal from the loan statement or app. For a card, use the total outstanding on your latest statement.
- Interest rate: the annual rate. Card statements show a monthly rate; multiply it by 12.
- EMI: the fixed instalment. For a card, enter what you will actually pay each month, not the minimum due.
Then enter the extra amount you can add every month on top of all EMIs. Compare the avalanche and snowball results, and pick the one you will stick with.
How the planner works
Each month we charge interest on every open loan and pay its EMI. Whatever is left of your total monthly budget (all EMIs plus your extra amount) goes to the priority loan:
- Avalanche: the highest interest rate first.
- Snowball: the smallest balance first.
When a loan closes, its EMI rolls over to the next priority loan, so your monthly outgo stays the same while debts disappear faster and faster.
Worked example: three debts, two strategies
Credit card dues ₹1.2 lakh at 36%, a personal loan ₹3.5 lakh at 13.5% and a car loan ₹90,000 at 9.2%, with ₹5,000 extra a month:
| EMIs only: debt-free in | 3 yrs 2 mos |
| EMIs only: total interest | ₹1,51,360 |
| Avalanche: debt-free in | 1 yr 10 mos |
| Avalanche: total interest | ₹88,840 |
| Snowball: debt-free in | 1 yr 10 mos |
| Snowball: total interest | ₹95,143 |
When each debt closes:
| Avalanche | Snowball | |
|---|---|---|
| Credit card dues | 1 yr 1 mo | 1 yr 2 mos |
| Personal loan | 1 yr 10 mos | 1 yr 10 mos |
| Car loan | 1 yr | 8 mos |
Avalanche attacks the 36% card first and saves ₹6,303 over snowball. Snowball goes after the small car loan first, so you get the satisfaction of one closed loan sooner, but the expensive card keeps charging interest for longer. With only three debts the gap is modest. With several cards and app loans it grows.
Pick snowball only if you know you need early wins to stay on track. A plan you abandon after three months saves nothing.
Why credit card dues come first
Card interest in India often runs at 3% to 3.75% a month, which is roughly 36% to 45% a year, and GST at 18% is added on top of the interest and any late fee. On the example card, the first month's interest alone is ₹3,600 before GST.
Revolving is worse than it looks. Once you carry a balance, interest is usually charged from the date of each purchase, and new spends get no interest-free period until the full dues are cleared. Stop using the card while you repay it. Converting the balance into a card EMI at a lower rate can help; check the processing fee and true rate with the credit card EMI calculator.
When a consolidation loan helps
Suppose you take a 3-year personal loan at 14% with a 2% fee to clear both the card and the old personal loan, keep paying the same combined EMI, and still add ₹5,000 a month:
| Fee incl. GST (added to the new loan) | ₹11,092 |
| Debt-free in | 1 yr 10 mos |
| Interest on all debts | ₹74,190 |
| Interest plus fee | ₹85,282 |
| Avalanche without consolidating | ₹88,840 |
Here consolidation wins, because it turns 36% card debt into 14% debt from day one. It works only if three things hold: the new APR is clearly below the card rate, you do not stretch the tenure to lower the EMI, and you stop running up the card again. If the old personal loan is at a fixed rate, check its foreclosure charge first with the personal loan foreclosure calculator, and compare consolidation offers with the loan offer comparison.
Common mistakes
- Prepaying the home loan while carrying card dues. The home loan is your cheapest debt; it should be last in the queue.
- Emptying your emergency fund. Keep enough cash to cover a few EMIs, or a single shock sends you back to the card.
- Missing a minimum payment on a lower-priority loan. Late fees and a bureau mark cost far more than you save.
Assumptions
- Interest rates stay the same; no new borrowing is added.
- Extra payments go to principal with no prepayment charges.
- For credit cards, the "EMI" is the fixed amount you plan to pay each month. GST on card interest is not included.
Frequently asked questions
What is the debt avalanche method?
Pay the minimum on every loan, then put every spare rupee towards the loan with the highest interest rate. When it is closed, move its EMI and the extra to the next-highest rate. It minimises total interest.
What is the debt snowball method?
Pay the minimum on every loan, then put the extra towards the smallest balance first. Closing loans quickly gives motivation. It usually costs a little more interest than avalanche.
Which loan should I close first: credit card, personal loan or home loan?
Usually the most expensive one first. Credit card dues (often 36% to 45% a year) come before personal loans (10% to 24%), which come before car and home loans. Never miss minimum payments on any of them.
Should I consolidate my debts into one loan?
A consolidation loan can help if its rate (including fees) is lower than the weighted rate of your current debts and you stop adding new debt. Compare the offer with the loan offer comparison tool.
Is paying the minimum due on my credit card enough?
It keeps your account regular and protects your credit score, but it barely touches the balance. Interest keeps running on the full outstanding, and new purchases lose their interest-free period until you clear the dues completely. Treat the minimum as a floor, never as a plan.
Will closing loans early improve my CIBIL score?
Paying every EMI on time matters most. Clearing card dues also lowers your credit utilisation, which usually helps. Closing an instalment loan early does not hurt, but do collect the no-dues certificate and check that the bureau report shows the account as closed within a couple of months.