Pay off debt faster and save thousands in interest by targeting your highest interest rate debts first. Use our free debt avalanche calculator to create your personalized payoff plan.
Enter all your debts into the debt avalanche calculator with their interest rates
The debt avalanche calculator orders debts from highest to lowest interest rate
Pay minimums on all, then attack the highest interest rate debt aggressively
Once paid off, cascade payments to the next highest rate, maximizing savings
Goes to highest interest rate debt
Enter your debts to see how the debt avalanche method can save you thousands in interest by targeting high-rate debts first.
The debt avalanche method is a mathematically optimal debt repayment strategy that prioritizes paying off debts with the highest interest rates first. This approach minimizes the total amount of interest paid over the life of your debts, potentially saving you thousands of dollars compared to other repayment methods.
Here's how it works: You make minimum payments on all your debts, then apply any extra money to the debt with the highest interest rate. Once that debt is paid off, you move to the next highest rate, creating an "avalanche" effect as freed-up payments cascade down to eliminate remaining debts faster.
If you have a credit card at 24% APR ($5,000), car loan at 6% APR ($15,000), and student loan at 4% APR ($25,000), the avalanche method targets the credit card first despite its lower balance, saving you approximately $3,500 in interest compared to paying proportionally.
For an in-depth comparison of both methods, read our comprehensive guide: Debt Snowball vs Debt Avalanche
| Aspect | Debt Avalanche | Debt Snowball |
|---|---|---|
| Strategy | Highest interest rate first | Smallest balance first |
| Total Interest Paid | Lowest (saves most money) | Higher |
| Time to Debt Freedom | Fastest mathematically | Slightly longer |
| Psychological Wins | Slower initial progress | Quick wins boost motivation |
| Best For | Disciplined, math-focused individuals | Those needing motivation boosts |
According to financial experts and research from organizations like the Consumer Financial Protection Bureau, the avalanche method saves more money, but the snowball method's psychological benefits help some people stick to their plan better.
Gather statements for all debts: credit cards, loans, mortgages. Note the balance, interest rate, and minimum payment for each.
Rank your debts from highest to lowest interest rate. This becomes your attack order.
Continue making minimum payments on all debts to avoid late fees and credit damage.
Put every extra dollar toward the debt with the highest interest rate until it's completely paid off.
Once a debt is paid off, add its payment amount to your attack on the next highest rate debt.
Combine multiple debts into a single loan with a potentially lower interest rate. This simplifies payments but may extend the repayment period. Best for those with good credit who qualify for favorable rates.
Move high-interest credit card debt to a card with a 0% introductory APR. Effective if you can pay off the balance during the promotional period, typically 12-21 months.
Work with a nonprofit credit counseling agency to negotiate lower interest rates and create a structured repayment plan. According to the U.S. Department of Justice, legitimate agencies are listed at justice.gov/ust.
Negotiate with creditors to pay less than you owe. This severely damages credit and should be a last resort before bankruptcy. Be wary of debt settlement companies charging large upfront fees.
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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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