How It Works
The avalanche method prioritizes the highest interest rate. Once it is paid, the available payment capacity rolls into the next-highest rate.
The calculator orders debts by interest rate from highest to lowest while maintaining the minimum payments and extra payment you specify. When the highest-rate debt is paid, that payment rolls into the next target.
Because the highest-rate debt receives extra payment capacity first, the avalanche method can reduce interest compared with other payoff orders when all other assumptions remain equal.
Formula
- B — Balance
- r — Monthly interest rate
- P — Monthly debt budget
Example
Example inputs: Three debts of $1,500 at 20%, $5,000 at 15%, and $10,000 at 10% with a $700 monthly budget.
Result: The result estimates total months to clear the balances using the highest-APR-first order.
Frequently Asked Questions
Why use avalanche?
It directs extra payment capacity toward higher-rate debt first, which can reduce interest in many scenarios.
Does avalanche always finish faster?
Not necessarily. The payoff timeline depends on balances, minimum payments, rates, and extra payment. Its defining feature is the order based on interest rate, not a guaranteed payoff time.
How is avalanche different from snowball?
Avalanche targets the highest interest rate first, while snowball targets the smallest balance first. The two methods can produce different payoff dates and interest totals.
This calculator provides estimates for informational purposes only and should not be considered financial, tax, or legal advice.