The debt avalanche method targets the highest interest rate first while paying minimums on other debts. Extra payments go to the most expensive debt, which typically saves the most money on interest over time.
How to use this calculator
- Enter up to three debts with balance, APR, and minimum payment.
- Enter your extra monthly payment toward debt.
- Review the payoff order starting with the highest interest rate.
- Compare total months to debt-free and total interest paid.
Formula
After monthly interest and minimum payments, all extra funds attack the debt with the highest APR. When that debt is eliminated, payments roll to the next highest rate until all balances are zero.
Example
If you owe $5,000 on a 19.99% card and $2,000 on a 9.99% loan, avalanche pays the credit card first to stop high-interest charges as quickly as possible.
Frequently asked questions
- Does avalanche always save more interest?
- Usually yes compared to snowball, because high-rate balances shrink faster. The difference depends on your specific balances and rates.
- Is avalanche harder to stick with?
- Some people find avalanche slower to show wins if the highest-rate debt is also the largest. Snowball may feel easier emotionally, but avalanche is often cheaper mathematically.