Create balanced debt elimination with the proportional payment method. Distribute extra payments proportionally across all debts for steady, coordinated progress.
Distributed proportionally across all debts
Enter your debts to see how the proportional payment method creates balanced, coordinated debt elimination.
The proportional payment method, also known as the balanced approach, distributes extra debt payments proportionally across all your debts based on their balances. Unlike the debt snowball (smallest first) or debt avalanche (highest rate first) methods, this strategy provides a balanced approach that reduces all debts simultaneously.
This method allocates extra payments based on each debt's percentage of your total debt. For example, if one debt represents 30% of your total debt, it receives 30% of any extra payment. This creates steady progress across all debts while maintaining psychological balance.
With total debt of $30,000 including a $15,000 car loan (50%), $10,000 credit card (33%), and $5,000 personal loan (17%), a $300 extra payment would be allocated: $150 to car loan, $100 to credit card, and $50 to personal loan.
Want to learn more about choosing between methods? Read our detailed guide: Debt Snowball vs Debt Avalanche
| Factor | Proportional | Snowball | Avalanche |
|---|---|---|---|
| Strategy | Balance-based allocation | Smallest balance first | Highest interest first |
| Progress Visibility | All debts reduce steadily | Quick eliminations | Slow initial progress |
| Interest Cost | Moderate (between others) | Highest cost | Lowest cost |
| Psychological Impact | Balanced satisfaction | High motivation from wins | Requires discipline |
| Complexity | Medium (requires calculation) | Simple (smallest first) | Simple (highest rate first) |
| Best For | Balanced, analytical types | Motivation seekers | Cost minimizers |
Financial advisors often recommend the proportional method for clients who want steady progress without the extremes of other strategies. It provides psychological benefits through visible progress on all debts while maintaining reasonable interest costs.
Add up all your debt balances to get your total debt amount. This becomes the base for percentage calculations.
Divide each debt balance by the total debt to get its percentage. For example: $5,000 ÷ $20,000 = 25%.
Multiply your extra payment by each debt's percentage. A $400 extra payment to a 25% debt gets $100.
Pay the minimum plus proportional extra amount to each debt. Track balances to recalculate percentages monthly.
Recalculate percentages each month as balances change to maintain proportional allocation of extra payments.
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Important: Debt Planner is an educational tool only. We are not licensed financial advisors, credit counselors, or debt management professionals. All calculations are for educational purposes. Please consult qualified financial professionals before making significant financial decisions.
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