What is the Debt Payoff Explorer?
Debt management strategies generally fall into four categories: organizing, reducing, restructuring, and preventing new debt.
The Debt Payoff Explorer was designed to help you organize your debt and explore different payoff strategies and create a comprehensive debt reduction plan.
What Methods are Used in the Debt Payoff Explorer?
The Avalanche Method
The avalanche method involves making minimum payments on all debts and allocating any extra funds toward the debt with the highest interest rate
Pros:
Saves the most on interest
Can lead to faster overall payoff
Cons:
Progress may feel slow, especially if the highest interest debt has a large balance
May be less motivating
The Snowball Method
The snowball method focuses on building psychological momentum by making minimum payments on all debts and allocating extra funds toward the debt with the lowest balance
Pros:
Quick wins can help build momentum and confidence
Helps you knock out individual debts quickly and can free up money to tackle the rest of your debt
Cons:
May result in paying more interest over time
Could take longer to become debt free
Debt Repayment Details
After you select a strategy, the Explorer will provide a detailed plan to help you pay off your debts based on the information you have entered. There are three additional charts provided to help you with the process:
Debt payment schedule shows you the recommended payments for each debt over time based on the strategy you selected
Debt balances over time show you how your balances are estimated to decrease over your selected repayment schedule
Lifetime interest payments show you the estimated interest you will pay over the course of your payoff timeline
How to Model Debt Paydown in your plan
While applying to your plan isn’t available just yet, you can still take the payment plan with you. Export your payment plan to a CSV to keep for your records or share with others.
What are Common Strategies not Addressed in the Debt Payoff Explorer?
Strategies to Prevent Additional Debt
Build an emergency fund: Even $500–$1,000 can keep you from adding new debt.
Limit new borrowing: Freeze credit cards or use them only for budgeted expenses.
Automate payments: Avoid late fees and credit score damage.
Track spending: Use an app or spreadsheet to spot problem areas.
Strategies to Manage Debt
Scrutinize your spending and look for ways to reduce expenses, and free up more funds to pay down your debt.
Try to negotiate interest rates on your credit cards.
Look into a forbearance or forgiveness program for student loans.
Seek help from a Credit counseling agency, financial adviser, debt professional or debt settlement firm (last resort)
Note: The Debt Payoff Explorer always runs on your Average Forecast, regardless of the mode used elsewhere in your plan.
NRW-8030AO (06/26)