Debt avalanche calculator
Pay the highest-rate debt first to minimise total interest — see your payoff order, time to debt-free, and total interest under the avalanche method.
Calculator debtLogic updated April 2026
This calculator runs the debt avalanche strategy: pay the minimum on every debt, throw your extra payment at the highest-rate debt first, then cascade that minimum into the next-highest-rate debt as each is cleared. It's the strategy that minimises total interest paid — the mathematically optimal payoff order, even though the early wins can be slower than the snowball method.
How this is calculated
Formula
Each month: balance = (balance × (1 + r/12)) − payment ; extra goes to the highest-rate non-zero balance ; freed minimums roll into the extra poolStep-by-step
- Sort debts by interest rate descending — the highest-rate debt is the first target
- For each month, accrue interest on every debt at its monthly rate, then apply the minimum payment to each
- Apply the entire extra monthly payment to the current target debt on top of its minimum
- When the target debt reaches zero, add its minimum payment to the extra pool and switch the target to the next-highest-rate remaining debt
- Repeat month-by-month until all debts reach zero or the simulation cap of 600 months is reached
- Track payoff order, total interest paid, and months to debt-free
- Rounding mode
- ROUND_HALF_UP
- Precision
- 20-digit internal precision (Decimal.js), rounded to 2 decimal places for display
- Logic last reviewed
Assumptions & limitations
What this calculator assumes
- Each debt accrues interest monthly at its stated annual rate
- Minimum payments are fixed for the life of each debt
- Extra payment is made consistently every month
- When a debt is paid off, its minimum payment rolls into the extra pool
- Priority order: highest interest rate first
- Simulation is capped at 600 months (50 years) to bound analysis
What this calculator doesn’t account for
- Does not model rate changes during the payoff period
- Does not include any new debt added during the payoff
- Does not account for promotional rates (balance transfers, intro APRs) expiring
- Does not model behavioural lapses — assumes the extra payment is made every single month
- Does not factor in tax effects on tax-deductible debts
Worked example
A borrower has three debts and $300 of monthly extra payment available.
| Input | Value |
|---|---|
| Store card | $1,200 @ 24%, $50/month minimum |
| Credit card | $5,000 @ 18%, $150/month minimum |
| Personal loan | $10,000 @ 11%, $220/month minimum |
| Extra monthly payment | $300 |
Debt-free in ~35 months, paying off in order: store card → credit card → personal loan
Avalanche orders by rate: 24% store card, 18% credit card, 11% personal loan. With $300 of extra against the store card's $50 minimum, the small high-rate balance clears quickly. Its $50 minimum rolls in, so $350 plus the credit card's $150 minimum tackles the credit card next, then the cascading pool hits the personal loan. In this example the order matches snowball, but avalanche saves slightly more interest because the highest-rate debt was attacked first.
Frequently asked questions
What is the debt avalanche method?
A debt-payoff strategy that orders debts from highest interest rate to lowest and attacks them in that order, regardless of balance size. Every freed minimum rolls into a growing 'avalanche' that hits each subsequent debt with more force. It minimises total interest paid because every dollar of extra payment is killing the most expensive debt first.
Why does avalanche save more interest?
Because interest is the price of borrowing — the higher the rate, the more interest you accrue per month per dollar of balance. Killing the highest-rate balance first eliminates the most expensive interest charges as quickly as possible. Snowball ignores rate, so it can leave a high-rate balance accruing interest while a low-rate balance is paid off first.
How do I start the avalanche method?
Sort your debts by interest rate, then commit your extra monthly payment entirely to the highest-rate debt while paying minimums on the rest. Re-run this calculator after each payoff milestone to see the next target and your updated debt-free date. The hardest part is sticking with the strategy through the long first phase before any debt closes.
Can I combine snowball and avalanche?
Yes — a hybrid often outperforms either pure strategy. A common variant is to clear one or two of the smallest debts first for the morale boost, then switch to avalanche for the bulk of the payoff. Or run avalanche but reorder if two debts are within 1–2% of each other and one has a much smaller balance — that nearly-rate-tied debt is a fast-win opportunity.
What if multiple debts have the same rate?
The calculator's tie-breaker for avalanche is the order in which the debts were entered — but in practice, when rates tie, prioritise the one you can clear fastest (smaller balance or larger minimum payment) so its minimum joins the avalanche pool sooner. The cost difference is usually tiny; the speed of building the cascading pool matters more.
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