Debt Payoff Calculator Philippines 2025

Plan your debt-free journey with our free calculator. Compare Avalanche vs Snowball methods. See your payoff date and total interest saved.

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Plan Your Debt Payoff

Add your debts and see how fast you can become debt-free

Your Debts

Click "Add Debt" to start adding your debts
₱
Amount above minimum payments to accelerate payoff

How to Use This Calculator

  1. Add your debts - Enter each debt's name, balance, interest rate (APR), and minimum payment
  2. Set your extra payment - Any amount above minimum payments you can dedicate to debt payoff
  3. Choose your strategy - Avalanche (save money) or Snowball (quick wins)
  4. Review your plan - See your debt-free date, total interest, and payment schedule

Avalanche vs Snowball: Which is Better?

🏔️ Avalanche Method

How it works: Pay off debts with the highest interest rate first, regardless of balance.

Pros:

  • Saves the most money on interest
  • Mathematically optimal
  • Faster overall payoff (usually)

Cons:

  • May take longer to see first debt paid off
  • Can feel slow if highest-rate debt has large balance

Best for: Disciplined savers who are motivated by saving money

⛄ Snowball Method

How it works: Pay off debts with the smallest balance first, regardless of interest rate.

Pros:

  • Quick wins boost motivation
  • Fewer bills to manage sooner
  • Psychological momentum

Cons:

  • May pay more in total interest
  • Not mathematically optimal

Best for: People who need motivation and quick wins to stay on track

Common Debt Interest Rates in the Philippines

Debt Type Typical Interest Rate Notes
Credit Cards 24-36% per year Highest priority to pay off
Personal Loans (Banks) 12-24% per year Varies by bank and credit score
SSS Salary Loan 8% per year Low rate, 24-month term
Pag-IBIG MPL 10.5% per year 24-month term
Car Loans 8-15% per year Secured by vehicle
Online Lending Apps 24-60%+ per year Avoid if possible, very high rates

Warning: Predatory Lending Apps

Many online lending apps in the Philippines charge extremely high interest rates (some over 100% APR when fees are included). If you have debt from these apps, prioritize paying them off first, and avoid borrowing from them again.

Tips for Faster Debt Payoff

  • Stop adding new debt - Cut up credit cards or freeze them if needed
  • Find extra income - Side hustles, selling unused items, overtime work
  • Reduce expenses - Review subscriptions, negotiate bills, cook at home
  • Use windfalls wisely - Put bonuses, 13th month pay, and tax refunds toward debt
  • Consider balance transfers - Some banks offer 0% promo rates for credit card balance transfers
  • Negotiate with creditors - Ask for lower rates or payment plans if struggling

The Debt-Free Journey

Remember: Every peso paid toward debt is a step toward financial freedom. Track your progress, celebrate milestones (every debt paid off!), and stay focused on your goal. You can do this!

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Frequently Asked Questions

What is the difference between the Avalanche and Snowball methods?
The Avalanche method pays off debts with the highest interest rate first, saving you the most money on interest. The Snowball method pays off the smallest balance first, giving you quick wins for motivation. Mathematically, Avalanche is better, but Snowball works better for some people psychologically.
Which debt payoff method should I use?
Use Avalanche if you're disciplined and want to save the most money. Use Snowball if you need quick wins to stay motivated, or if your debts have similar interest rates. The best method is the one you'll actually stick to consistently.
How much extra should I pay toward debt each month?
After covering minimum payments on all debts, put any extra money toward your target debt (highest rate or lowest balance). Even an extra ₱500-₱1,000/month can significantly speed up your debt-free date. Use the calculator to see how extra payments affect your timeline.
What debts should I include in my payoff plan?
Include all consumer debts: credit cards, personal loans, SSS loans, Pag-IBIG MPL, car loans, and any other loans with regular payments. You may exclude mortgage (housing loan) as it's typically long-term secured debt with lower interest rates.
Should I build an emergency fund first or pay off debt?
Build a small emergency fund first (₱10,000-₱20,000 or 1 month of expenses). This prevents you from taking on new debt when emergencies happen. Then focus on paying off high-interest debt (credit cards), while slowly building your full emergency fund.