Question 1

What is the difference between avalanche and snowball payoff methods?

Accepted Answer

Avalanche directs extra payment to the debt with the highest interest rate first, while you keep paying the minimums on the others. With the same balances and payment budget, prioritizing higher-rate debt may reduce interest over time. Snowball directs extra payment to the smallest balance first; paying off a smaller debt sooner may create an early sense of progress. Neither method is universally best. The choice can depend on your circumstances, discipline, and goals. This is general education, not a personalized recommendation.

Question 2

How can I compare a consolidation offer I enter?

Accepted Answer

Enter the offer amount, APR, term in months, origination fee, and other known fees. The planner estimates a monthly payment and total repayment from those entries so you can compare the offer with your selected payoff estimate. Check whether the offer amount, after any fee deducted from proceeds, would cover the balances and fees you listed; an uncovered amount is not a like-for-like comparison. The estimate is illustrative, not a binding offer, approval, or guarantee. PayoffHarbor does not verify or endorse a lender or its terms, so confirm current terms directly with the lender. A longer term can lower a monthly payment while extending repayment and may mean more interest and fees overall. Consolidation moves debt into a new repayment structure; it does not erase the underlying debt.

Question 3

What information and assumptions go into a payoff projection?

Accepted Answer

The projection uses the balances, regular APRs, minimum payments, one-time fees, any promotional APR and its remaining months, and your total monthly budget. The budget includes minimums. Each month, the entered APR divided by 12 is applied to that month’s starting balance and rounded to cents; a one-time fee is added at the start. The entered minimums are paid first and capped at the amount owed, then remaining budget goes to the selected strategy. An entered promotional APR applies for its stated months, then the regular APR is used; while active, it also affects avalanche priority. Payments are modeled at month end; weekly or biweekly choices are converted to a monthly equivalent, and early partial-payment interest savings are not modeled. Actual lenders may calculate interest differently or apply payments on different dates.

Question 4

Are payoff estimates predictions, guarantees, or financial advice?

Accepted Answer

No. They are educational illustrations based on your entries, not predictions of your actual outcome, guarantees, or personalized financial advice. Results can change if balances, payments, fees, minimums, promotional or variable rates, lender calculation methods, payment posting dates, or personal circumstances change. Review your statements and offer documents, and confirm current terms with the lender.

Question 5

Does PayoffHarbor find, verify, or recommend lenders?

Accepted Answer

No. The offer comparison is for terms you enter yourself. PayoffHarbor does not make or arrange loans, verify a lender or its offer, endorse terms, or decide which option you should choose. Use the lender’s current documents to confirm the rate, fees, payment, and term before making a decision.