What this calculator answers

The debt avalanche method is the mathematically optimal way to pay off multiple debts: list every balance with its APR, send all extra payments to the highest-APR debt while making minimums on the rest, and roll the freed-up payment into the next-highest-APR debt when the first is gone. This tool orders your debts correctly and shows the projected total interest paid and payoff timeline.

How the math works

Each month, every debt accrues interest at its individual rate on its remaining balance. You make the minimum payment on every debt to stay current. Any extra cash above the sum of minimums goes entirely to the debt with the highest APR. When that debt hits zero, its old minimum plus the extra payment all roll into the next-highest-APR debt. This snowballing effect of freed-up minimums is what makes the avalanche faster and cheaper than paying everything evenly.

When to use it

• You have three or more debts (credit cards, personal loans, student loans, etc.) and want to know which one to attack first.
• You are deciding between the avalanche method (highest APR first) and the snowball method (smallest balance first) and want to see the cost difference in real dollars.
• You just freed up cash by paying off a car or other debt and want to see how to redirect it most effectively.
• You want a concrete payoff date to plan around, not just a vague 'someday' goal.

Common mistakes

• Treating all debt equally. A 5 percent student loan and a 26 percent credit card are not the same problem; the avalanche order matters enormously for total cost.
• Stopping minimum payments on lower-priority debts. Even one missed minimum can trigger penalty APRs and late fees that erase weeks of avalanche progress.
• Failing to roll freed-up minimums into the next debt. The cascading effect is what makes the method work; without it you are just paying down debts in sequence at flat speed.
• Switching strategies halfway through. The avalanche only delivers the projected savings if you stick with it. Pick a method and commit.

A worked example

You have a 1,200 dollar credit card at 26 percent (minimum 50 dollars), a 5,400 dollar credit card at 19 percent (minimum 120 dollars), and a 14,000 dollar personal loan at 11 percent (minimum 320 dollars). Total minimums are 490 dollars and you can pay 800 dollars a month total. The avalanche sends 310 dollars extra to the 26 percent card, which pays off in roughly four months. The freed-up 50 dollars plus the original 310 dollars then attacks the 19 percent card, paying it off in about 14 more months. The full debt is gone in roughly 34 months with around 4,800 dollars of interest. The snowball method (smallest first) takes about the same time but costs roughly 600 dollars more in interest.

Frequently asked questions