Debt Payoff Calculator Canada 2026

Enter all your debts and see exactly when you'll be debt-free — using the avalanche (lowest interest paid) or snowball (fastest wins) method.

Enter Your Debts

Add all your credit cards, lines of credit, car loans, student loans, etc.

Debt NameBalance ($)Interest Rate (%)Min. Payment ($)

Choose Payoff Method:

Avalanche vs Snowball: Which Is Right for You?

🏔️ Avalanche Method

Pay minimums on all debts, then put all extra money toward the highest interest rate debt first. Once paid off, attack the next-highest rate.

Best for: Mathematically minimizing total interest paid. Saves the most money over time.

💰 Saves the most money

❄️ Snowball Method

Pay minimums on all debts, then put all extra money toward the smallest balance first. Quick wins keep you motivated.

Best for: Staying motivated. Great if you have many small debts or struggle with consistency.

💪 Builds momentum

6 Canadian Debt Payoff Tips

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Balance Transfer Cards

Transfer high-rate credit card debt to a 0% balance transfer card (many Canadian banks offer 0% for 6–12 months). Pay it off during the promo period.

📉

Negotiate Lower Rates

Call your credit card company and ask for a rate reduction — especially if you've been a loyal customer or have a competing offer. This works surprisingly often.

🏦

HELOC for Consolidation

If you own a home with equity, a HELOC at 6–8% is far cheaper than 19.99% credit card debt. Consolidate high-rate debts into your HELOC.

💰

Stop Earning Nothing on Savings

Move your savings to KOHO (3.0%) or EQ Bank (3.75%) while paying off debt — the extra interest can fund additional debt payments.

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Debt-to-Income Ratio

Aim to keep your debt payments under 40% of gross income. Above 40% is a financial red flag — prioritize paying down debt aggressively.

✂️

Cut One Expense

Find one recurring expense to cut ($50–$100/month) and redirect it entirely to debt repayment. Small consistent amounts add up to months off your payoff timeline.

While You Pay Off Debt — Earn More on Your Savings

KOHO pays 3.0% interest on your balance — 60× more than Big 5 banks. The extra interest helps you pay down debt faster. Get $100 free with code 45ET55JSYA.

Open KOHO — $100 Bonus →

Debt Payoff FAQ

Avalanche vs snowball — which saves more money?
The avalanche method always saves more total interest because you're eliminating the highest-rate debt first. The difference can be hundreds to thousands of dollars. However, the snowball method's psychological wins help many people stay consistent — and the best method is the one you'll actually stick to.
What is the average Canadian credit card debt in 2026?
The average Canadian carries approximately $4,200 in credit card debt. Combined with auto loans, student loans, and lines of credit, average Canadian non-mortgage debt is around $22,000. The average credit card interest rate in Canada is 19.99%.
Is it better to pay off debt or invest?
It depends on the interest rate. Generally: pay off debts with rates above 7–8% before investing (guaranteed return > expected stock market returns). For debts below 5% (student loans, car loans), investing in a TFSA or RRSP while making minimum payments may build more long-term wealth. For credit card debt at 19.99%, always pay it off first.
What is a good debt-to-income ratio in Canada?
Lenders look at your Total Debt Service (TDS) ratio — all debt payments as a % of gross income. Under 40% is considered acceptable. Under 30% is healthy. For a mortgage, your Gross Debt Service (GDS) ratio (housing costs only) should be under 39%. Above 43% TDS makes qualifying for new credit very difficult.