Debt Avalanche Calculator
What the Debt Avalanche Method Does
The debt avalanche method attacks debt by paying off balances from highest APR to lowest, regardless of balance size. This mathematically optimal approach minimizes total interest paid—every dollar you save on interest is money that stays in your pocket instead of going to creditors. While it might take longer to eliminate your first debt compared to the snowball method, you'll reach debt-free status faster and cheaper overall.
How the Debt Avalanche Method Works
The debt avalanche follows a precise logic: sort debts by APR (highest to lowest), make minimum payments on everything, and direct all extra money to the highest-rate debt. Once it's gone, roll that payment to the next highest APR. This prevents expensive interest from accruing on large balances.
The math is simple: a $1,000 balance at 24% APR costs you $20/month in interest. The same balance at 12% APR costs $10/month. Eliminating the 24% debt first stops that $20 monthly bleed immediately. Less interest accruing means more of each payment goes to principal, accelerating payoff exponentially.
When this works best: You're motivated by saving money more than checking boxes. You can maintain discipline without needing frequent wins. Your highest-rate debts aren't your smallest balances.
Calculate Your Avalanche Plan
Your Debts
Monthly Payment
How This Calculator Works
This calculator helps you create a debt payoff strategy that minimizes total interest costs. Here's how it works:
- Enter your debts: Input each debt's balance, APR, and minimum payment. The calculator handles multiple debts simultaneously.
- Set total monthly payment: This is what you can afford to pay across all debts each month, including all minimums.
- Calculator prioritizes: Debts are automatically ranked by APR, highest first. Extra payment goes to the highest-rate debt.
- View your timeline: See when each debt will be eliminated and your total debt-free date.
- Review interest savings: Compare total interest paid using this method versus other approaches.
The avalanche method is mathematically optimal because it targets high-interest debt first, preventing expensive interest charges from accumulating over time.
Understanding Your Results
Your results show a complete payoff timeline based on the avalanche method—targeting your highest APR debts first while maintaining minimum payments on everything else.
What the timeline means
The debt-free date assumes you maintain consistent monthly payments without taking on new debt. Each debt shows when it will reach $0 balance. Early debts may take longer to pay off compared to the snowball method, but you'll save more money overall.
Common scenarios
If your highest-APR debt is also your largest balance, you might not see a payoff for many months. This is mathematically correct but can feel discouraging. If you need earlier wins for motivation, the snowball method might fit better—though it costs more in interest.
If your timeline feels too long, even small payment increases make a significant difference. Adding $50-100 per month can shave months or years off your debt-free date.
Important assumptions
These results assume interest rates stay constant, you make on-time payments every month, and you don't add new debt. Changes to any of these factors will shift your timeline. The calculator also assumes minimum payments remain constant—in reality, credit card minimums may decrease as balances drop.
Avalanche vs Snowball vs Fixed Payment
Three common approaches exist for paying off multiple debts. Each has different trade-offs:
Debt Avalanche (this calculator)
Targets highest APR first. Saves the most money in total interest. May take longer to see first debt eliminated. Best for disciplined individuals focused on mathematical optimization.
Debt Snowball
Targets smallest balance first. Creates quick wins and psychological momentum. Costs more in total interest than avalanche. Best for people who need early motivation to stick with a plan.
Fixed/Equal Distribution
Splits extra payment equally across all debts. No strategic optimization. Usually the most expensive approach. Useful as a baseline for comparison but rarely recommended as a strategy.
Compare for yourself: Use our Debt Payoff Comparison Calculator to see all three methods side-by-side with your specific debts.
Frequently Asked Questions
How accurate is this calculator?
The calculator uses standard amortization formulas and is accurate for the inputs provided. However, results assume constant interest rates and consistent payments. Real-world factors like rate changes, late fees, or irregular payments will affect your actual timeline. Credit card interest calculations can vary by issuer (some use average daily balance, others use previous balance), which may cause minor differences from your statements.
What if I can't afford the monthly payment I entered?
If the total monthly payment exceeds what you can afford, re-run the calculation with a realistic number. The minimum total payment must cover all minimum payments across your debts—anything less will cause balances to grow rather than shrink. If you can't meet minimums, you may need to explore debt consolidation, settlement, or credit counseling options.
Should I use avalanche if my highest-APR debt is also my largest?
Mathematically, yes—avalanche always minimizes total interest. Psychologically, it depends on your personality. If seeing the first debt eliminated quickly keeps you motivated, snowball might work better even though it costs more. You can use our comparison calculator to see exactly how much the snowball method would cost in extra interest and decide if the motivation is worth it.
What happens if my interest rates change?
Rate changes will shift your timeline and total interest paid. If rates decrease, you'll pay off debt faster with less interest. If rates increase, your timeline extends and costs rise. For variable-rate debts (like most credit cards), consider using a conservative estimate or re-running the calculation periodically with updated rates. Fixed-rate debts (like personal loans) won't change unless you refinance.
Can I pay off debts in a different order than the calculator suggests?
Absolutely. The avalanche method is optimal for minimizing interest, but you're free to prioritize debts however you choose. Some people prioritize debts with negative emotional weight (like an ex-partner's loan) or debts that cause stress (like family loans) even if it costs more mathematically. The calculator simply shows the most cost-effective path—the choice is yours.
Will following this plan hurt my credit score?
No. Paying off debt according to any structured plan improves your credit score over time by reducing your credit utilization ratio and establishing a positive payment history. Your score may fluctuate month-to-month as balances change, but the long-term trend will be positive as you eliminate debt. Closing paid-off credit card accounts can sometimes temporarily lower your score by reducing available credit, so consider keeping cards open with $0 balance.
Should I build an emergency fund before aggressively paying down debt?
Most financial advisors recommend a small emergency fund ($500-1000) before aggressive debt payoff, then building a larger emergency fund (3-6 months expenses) after debt is eliminated. Without any emergency savings, unexpected expenses force you onto credit cards, undoing progress. The exact balance depends on job stability, expense predictability, and risk tolerance.
What if I get a windfall (bonus, tax refund, etc.)?
Apply windfalls to your highest-APR debt to maximize impact. Even a one-time lump sum payment dramatically reduces total interest paid and shortens your timeline. After applying a windfall, re-run the calculator with your new balances to see the updated payoff schedule. The psychological boost of jumping ahead months or even years can reinforce commitment to the plan.
How does this compare to debt consolidation?
Debt consolidation rolls multiple debts into one loan, ideally at a lower average interest rate. If you can qualify for a consolidation loan below your weighted average APR, it may save more than avalanche alone. However, consolidation requires good credit for favorable rates, may involve origination fees, and only works if you don't accumulate new debt. Use our Debt Consolidation Calculator to compare options.
Is the avalanche method better than making extra payments on my mortgage?
It depends on interest rates. If your credit card APR is 18% and your mortgage is 4%, paying off the credit card first saves much more money. However, mortgages have tax benefits (deductible interest for many borrowers) while credit card interest is not deductible, which can affect the math. Generally, prioritize high-interest consumer debt over low-interest mortgage debt.
Can I use this for student loans or car loans?
Yes. The avalanche method works for any debt type—credit cards, personal loans, student loans, auto loans, or medical debt. Enter each debt's current balance, APR, and minimum payment. The calculator doesn't distinguish between debt types; it simply prioritizes by interest rate. Be aware that some loans (like federal student loans) offer benefits like income-driven repayment or forgiveness programs that might make them worth treating differently.
What if my minimum payments change over time?
Credit card minimums typically decrease as your balance drops (usually 1-3% of the current balance). The calculator assumes constant minimums for simplicity. In reality, decreasing minimums mean you could potentially pay off debt faster than projected if you maintain your original payment amount rather than reducing it as minimums drop. This is actually a benefit—treat your initial total payment as fixed regardless of minimum changes.
Calculation Steps:
- Sort all debts by APR (highest to lowest)
- Each month, apply minimum payments to all debts
- Apply all remaining payment to the highest-APR debt
- Calculate monthly interest: (balance × APR) ÷ 12
- When highest-APR debt reaches $0, roll payment to next highest
- Repeat until all debts are eliminated
Why This Minimizes Interest: High-APR balances generate more interest per dollar. Eliminating them first prevents that interest from compounding, saving money over the payoff period.
Key Assumptions: Constant monthly payment, no new debt added, on-time payments, interest rates remain stable.