Debt Avalanche Calculator
Pay off debts by highest interest rate first
Debt-Free In
1 yrs 11 mo
Total Debt
$8,800
Total Interest
$1,382
Interest Saved vs Snowball Method
$373
Visualization
Snowball vs Avalanche Comparison
Choose winner by:
Snowball Method
Pay smallest balance first for quick wins
Avalanche Method
Pay highest interest rate first to save money
Interest Savings
$373
saved with avalanche method
Total Debt
$8,800
Results are estimates based on current balances and interest rates.
Results are estimates for informational purposes only and do not constitute financial advice. Actual payoff timelines may vary based on interest rate changes, fees, and payment consistency.
Debt Avalanche Calculator Formula
The debt avalanche method orders debts from highest to lowest interest rate. You pay minimums on all while focusing extra money on the highest-rate debt. This minimizes total interest paid.
How the Debt Avalanche Calculator Works
- 1List all your debts with balances and interest rates
- 2Order them from highest to lowest interest rate
- 3Pay minimum on all except the highest rate debt
- 4Put all extra money toward the highest rate debt until paid
- 5Move to the next highest rate and repeat
Debt Avalanche Calculator Key Terms
- Debt Avalanche
- A mathematically optimal payoff strategy that targets highest interest rate debts first to minimize total interest paid.
- Interest Rate Priority
- Focusing on eliminating high-rate debt first because each dollar of that balance costs more than lower-rate balances.
- Total Cost Minimization
- The goal of paying the least possible amount (principal plus interest) to become debt-free.
- Opportunity Cost
- The interest you continue paying on high-rate debt while focusing on lower-rate debt in other strategies.
Debt Avalanche Calculator Tips
- •Avalanche saves the most money on total interest paid
- •Works best when you're motivated by the math rather than quick wins
- •Create other milestones to celebrate since payoffs may take longer
- •Ideal when there's significant rate difference between debts
- •Consider a hybrid approach if the highest-rate debt is very large
When to Use This Debt Avalanche Calculator
- ✓You have high-interest debt (like credit cards at 20%+)
- ✓There's a significant rate spread between your debts
- ✓You're motivated by mathematical optimization
- ✓You can stay committed without frequent payoff wins
- ✓You want to minimize total interest paid
Debt Avalanche Calculator Examples
Credit Card Priority
Avalanche pays 24% card first, saving $420 vs snowball method over 24 months.
Mixed Debt Types
Prioritizing the 22% credit card before low-rate student loan saves significantly.
vs Snowball Comparison
Avalanche saves $580 interest and 2 months vs snowball, but fewer early wins.
Understanding Debt Avalanche in Depth
The debt avalanche method is the mathematically optimal approach to debt payoff. By targeting highest interest rates first, you eliminate the most expensive debt as quickly as possible, minimizing total interest paid over your payoff journey.
The Math Advantage
Consider two debts: $5,000 at 22% APR and $2,000 at 8% APR. The snowball method would pay the $2,000 first for a quick win. But that $5,000 at 22% accrues $92/month in interest while you focus elsewhere. Avalanche eliminates the expensive debt first, saving money.
When Avalanche Shines
The avalanche advantage grows when: there's a large interest rate spread between debts, the high-rate debt has a moderate balance (not so large that payoff takes years), you have the discipline to stick with a plan without frequent wins.
Potential Avalanche Challenges
If your highest-rate debt is also your largest, you might spend 2-3 years focused on one debt before seeing any payoff. This can be discouraging. Consider setting sub-milestones (every $1,000 paid) or using a hybrid approach for the first quick win.
Avalanche in Practice
List debts by interest rate, highest first. Pay minimums on everything except the top-rate debt. Attack it with every extra dollar. When eliminated, roll that payment to the next highest rate. You'll pay less total interest than any other systematic approach.
Debt Avalanche Calculator FAQs
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Marcus Chen
Financial Analysis SpecialistMarcus has over 12 years of experience in quantitative finance and personal financial planning. He specializes in loan analysis, investment modeling, and consumer debt strategies. His methodologies incorporate industry-standard financial mathematics used by major lending institutions.
Editorial Standards: All calculations use industry-standard financial formulas. Content is reviewed for mathematical accuracy and updated to reflect current market conditions. This tool provides estimates for informational purposes and does not constitute financial advice.