Updated · Built and checked by the PlinzoTools team, formulas tested against published sources
Plan a debt payoff order that tackles the highest interest rate first, minimizing total interest paid.
| Debt | Balance ($) | Rate (%) | Min Payment ($) |
|---|---|---|---|
| #1 | |||
| #2 | |||
| #3 | |||
| #4 |
The debt avalanche method pays off debts in order from highest interest rate to lowest, regardless of balance size, applying any extra payment to the highest-rate debt while making minimum payments on the rest. This is the mathematically optimal payoff order for minimizing total interest paid -- a genuinely different ordering algorithm from the Debt Snowball Calculator's smallest-balance-first approach.
Enter up to 4 debts (balance, interest rate, and minimum payment for each) plus any extra amount you can put toward debt each month. Leave unused rows at zero.
Debts are sorted from highest to lowest interest rate. Each month, minimum payments are made on all debts, and any extra payment goes entirely toward the highest-rate remaining debt. Once a debt reaches zero, its minimum payment amount joins the extra payment pool for the next highest-rate debt.
Interest accrues in proportion to a debt's rate, so eliminating the highest-rate balance first stops the most expensive interest accrual as early as possible -- mathematically, this always results in equal or lower total interest paid than any other payoff order, including the snowball method.
Suppose you have three hypothetical debts: a store card with $2,000 at 24% and a $60 minimum, a personal loan with $6,000 at 15% and a $120 minimum, and a second card with $1,200 at 19% and a $40 minimum. You also have $100 extra each month. The avalanche order is the store card first (24%), then the second card (19%), then the loan (15%), even though the second card has the smallest balance. Every month you pay all three minimums, and the entire $100 extra goes to the store card on top of its own minimum.
When the store card reaches zero, its $60 minimum plus the $100 extra, $160 in total, rolls onto the second card. When that card is cleared, its $40 minimum joins the pile and the personal loan receives all of the freed-up money. This rolling effect is why the payoff accelerates in the later months, and why the total time is usually much shorter than paying minimums alone.
Avalanche tends to matter most when your rates are far apart, for example a 25% card next to a 7% loan. If all your debts are within a point or two of each other, the interest savings versus any other order will be small, and you may prefer whichever order keeps you motivated. It is also worth checking whether a lower-rate consolidation or balance transfer would beat the plan. If you are struggling to cover even minimums, a nonprofit credit counseling agency can review your situation for free or low cost.
In pure total-interest terms, yes or equal -- but the snowball method's faster early wins (paying off a small balance quickly) can matter more for some people's motivation and consistency than the mathematically optimal savings.
Either order works equally well mathematically -- this calculator breaks ties by whichever order they were entered in, since the interest-cost outcome is identical either way.
You can, but a low-rate mortgage will simply land at the bottom of the order. Many people list only their high-rate consumer debts and keep long-term low-rate loans on their regular schedule.
The calculator assumes one steady extra amount. Enter a typical figure, then re-run it whenever your budget changes to see the updated timeline.
No. Minimums must always be paid on every account to avoid late fees and credit damage. Only the extra money is directed at the highest-rate debt.
Reference: Consumer Financial Protection Bureau