How the math works

Most debts use monthly interest: balance × (annual rate ÷ 12). We round to the cent. For debts that add interest daily, such as some payday loans and lines of credit, you can choose daily accrual: balance × (annual rate ÷ 365) × days in the month.

A promotional rate applies through its end month. Then the regular rate takes over. Variable rates use today’s value, so update the rate whenever your lender changes it.

This is planning math, not a copy of your statement. We don’t model exact statement dates, average daily balances, or fees. In one measured example, a $5,000 card at 19.99% with $500 paid on the 15th each month produced $514.92 of estimated interest. A day-by-day simulation produced $467.50. The monthly estimate was $47.42 higher, about $4 a month, and the payoff dates were within one month. That specific test was conservative, but real statements can still differ. We keep the comparison in the automated test suite as the engine changes.

Every method pays each minimum before assigning extra money. For a credit card, you can enter the lender’s rule as a percentage of the balance with a dollar floor. The minimum updates each month as the balance falls.

If a minimum is lower than the monthly interest, the balance grows even while you pay. We flag this clearly. The payment needs to rise above the interest, or the rate needs to come down, before the balance can fall.

Debt Snowball. Extra money goes to the smallest balance first. It may cost more interest, but reaching an early payoff can help with motivation.

Debt Avalanche. Extra money goes to the highest effective interest rate first. Under the plan’s assumptions, this usually produces the lowest interest cost of the two simple methods.

Smart Priority Plan (free account). Each month, it weighs interest rates, past-due or collection status, payday loans, promotional deadlines, cards near their limit, and debts that could close within about two months. The size and timing of a promotional-rate change affect the order. If there’s no cash cushion, part of the extra payment can be set aside for surprises first.

Adaptive Flex Plan (free account). It starts with Smart Priority, then updates from recorded payments, balances, and missed months. For uneven income, it budgets with 90% or 80% of the amount entered. Every update explains what changed.

When one debt is paid off, its payment moves to the next debt. That amount joins your extra payment, so the pace can increase as more debts reach zero.

We start with income, then subtract essentials, minimum payments, savings, and spending. If minimums fit only after changing flexible categories, the plan shows which amounts would need to change. If essentials plus minimums are above income, we pause the payoff date. The next steps cover essentials, contacting creditors, finding a reputable credit counsellor, and learning about federally regulated options through a Licensed Insolvency Trustee. We don’t recommend new borrowing to cover the gap.

If you enter credit limits, we estimate how much available revolving credit you use each month. The chart marks 90%, 80%, 50%, and 30% as reference points. The Financial Consumer Agency of Canada suggests trying to use less than 30%. Equifax, TransUnion, and lenders use their own scoring models, so any direction or range is educational. We never promise a score change.

We don’t model exact statement-cycle dates, annual fees, NSF fees, late fees, investment returns, or taxes. These simplifications keep the plan understandable and the math verifiable.

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