How to Calculate Debt Avalanche
What is Debt Avalanche?
Avalanche method pays debt with highest interest rate first (mathematically optimal) while minimum-paying others.
Step-by-Step Guide
- 1Input all debts with balances and rates
- 2Order by interest rate (highest first)
- 3Calculate payoff timeline and total interest
Worked Examples
Input
Credit card 18%, student loan 4%, car 5%
Result
Pay credit card first, saves ~$3,000 vs. snowball method
Interest savings significant
Common Mistakes to Avoid
- ✕Not accounting for minimum payments
- ✕Neglecting new charges during payoff
Frequently Asked Questions
Vs. snowball method?
Avalanche saves most money; snowball provides psychological wins (small balances first).
Ready to calculate? Try the free Debt Avalanche Calculator
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