Debt Payoff Calculator Canada 2026

No fee everyday banking

Set up direct deposit and skip the monthly fee. Free to open, and the Easy plan has no monthly fee. Worth doing if you will actually move your pay or your CRA deposits over, not if the card sits unused. Code BREMO2026.

See how it works

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

🔄

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.

📊

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 BREMO2026.

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.