What is the Debt Avalanche?
The debt avalanche pays minimums on everything and directs all spare money at the highest interest rate first. Because interest is what makes debt expensive, killing the costliest debt first minimises total interest and usually clears everything fastest.
It is mathematically optimal. Its weakness is motivational: if your highest-rate debt is also your largest, the first win can take a long time.
Formula & worked example
Pay minimums on all, direct everything else to the highest rate
When one clears, roll its payment into the next
Worked example: the same three debts — $28,000 at 23%, $6,000 at 6.5% and $44,000 at 12% — with $2,000 a month. The avalanche attacks the 23% card first, then the 12% loan, leaving the cheap 6.5% debt for last. You are debt-free in 4.3 years having paid $23,027 in interest — $3,575 less than the snowball on identical debts.
How to use this debt avalanche calculator
- Enter each balance and rate, leaving unused slots at zero.
- Enter the total monthly amount available across all debts.
- The table shows which debt is targeted first and when each clears.
- Compare against the snowball to see the interest difference for yourself.
Smart tips
- The avalanche always costs less interest — usually a few hundred to a few thousand, depending on the rate spread.
- If the rates are close together, use the snowball; the motivational benefit outweighs the tiny interest difference.
- A 0% balance transfer can beat both methods outright — but only if you clear it before the promotional rate ends.
- Never miss a minimum payment on any debt while attacking another; late fees and score damage outweigh the gains.
- Recalculate after each debt clears — rolling the freed payment forward is what makes both methods accelerate.
Frequently asked questions
What is the debt avalanche method?
Paying minimums on all debts while directing every spare dollar to the highest interest rate, then moving to the next highest.
How much does avalanche save over snowball?
It depends on the rate spread. On the example debts above it saves $3,575 and finishes a month sooner; where rates are similar the difference is minor.
Which method should I choose?
Avalanche if you are motivated by numbers and the spread is wide. Snowball if you need early wins to stay committed.
Should I consolidate instead?
Consolidation helps only if the new rate is genuinely lower and you stop borrowing. Otherwise it simply moves the debt around.
Want the theory behind the numbers? Read our debt guides on the Money Blog.