Guide

The debt snowball with a car loan and student loans

Yes, car loans and student loans can go in the snowball. The method is the same: minimums on everything, the extra on the smallest balance. What changes is the shape of the plan. The card goes fast, then the big loans take most of the time, with a much bigger payment aimed at them than their minimum.

The example (assumptions, not your numbers)
DebtBalanceAPRMinimum
Credit card$2,10024%$60/mo
Car loan$11,5006.5%$320/mo
Student loan$24,0005%$260/mo

Plus $300 a month on top of the minimums. Minimums held fixed, interest charged monthly at APR ÷ 12, no new charges. Figures below are the planner’s own math on these numbers, rounded to the dollar. Minimums only means paying each debt just its own minimum, nothing extra; when one is paid off, its minimum stops instead of moving to the next debt.

How the payment grows

Month one: the Credit card gets $360 (its $60 minimum plus the $300 extra). Once it’s gone, that whole amount moves to the car loan on top of its own minimum. When the car is paid off, all of it moves to the student loan.

  1. Credit card: paid off in month 7
  2. Car loan: paid off in month 22
  3. Student loan: paid off in month 45

Everything is paid off in 3 yr 9 mo at $940 a month, with about $3,980 in interest. Paying only each minimum would take 9 yr 9 mo and about $9,113 in interest.

Things to check on your own loans

Ask whether extra payments go to principal. Some lenders apply extra money to the next payment instead. Ask yours to apply it to the principal.

If your federal student loan payment depends on your income, the minimum can change from year to year. The example keeps it fixed. Update it in the planner when it changes.

Some people keep a low-rate loan at its minimum for good and only snowball the rest. That’s a fair choice. The figures above include both loans, paid off in full.

Open this example in the planner

Opens the free planner with this example already typed in. Swap in your own balances, rates and minimums. No signup, no bank connection, and your numbers stay in your browser.

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