Debt Avalanche Payoff Calculator
The debt avalanche method pays off the debt with the highest interest rate first, then rolls that payment onto the next-highest rate, and so on. Because it always attacks the most expensive interest, it minimises the total interest you pay. This calculator simulates up to three debts month by month: it accrues interest, applies minimum payments, and directs your extra payment to the highest-rate balance. It returns the number of months to be debt-free and the total interest paid. Enter the balance, annual rate, and minimum payment for each debt, plus any extra monthly payment.
Avalanche method
Each month: interest = balance * (annual rate / 12)
Pay minimum on every debt, plus extra to the highest rate
When a debt clears, roll its payment to the next highest rate
Repeat until all balances reach zero
Total interest = sum of all interest accrued
Avalanche orders debts strictly by interest rate, highest first, which produces the lowest total interest of any ordering for a given extra payment.
Payoff context
- Avalanche minimises interest; snowball can boost motivation with quick wins.
- Every extra dollar shortens the payoff and cuts total interest.
- Set unused debts to zero balance to model fewer than three debts.
- If a minimum is below the monthly interest, that debt will not pay off.
- Results assume fixed rates and minimums for the whole period.
Debt avalanche: frequently asked questions
What is the debt avalanche method?
The debt avalanche method directs every spare dollar to the debt with the highest interest rate first, while paying the minimum on the rest. When the highest-rate debt is cleared, its payment rolls onto the next-highest rate. This minimises total interest paid.
How does this differ from the snowball method?
The snowball method targets the smallest balance first for quick wins and motivation. The avalanche method targets the highest interest rate first to save the most money. Avalanche usually costs less interest; snowball can feel more rewarding early on.
How is the payoff time calculated?
The calculator simulates month by month. Each month, interest accrues on every balance at its monthly rate, minimum payments are applied, and any extra payment plus freed-up minimums go to the highest-rate debt. It counts the months until all balances reach zero.
What if the minimum payments are too low?
If a debt's minimum payment does not cover its monthly interest, the balance grows and the debt may never be repaid. The calculator caps the simulation and shows that the plan does not pay off, signalling that you need a higher payment.
Are the results exact?
They are exact for the inputs given, assuming fixed rates, fixed minimums, and the extra payment applied every month. Real accounts may have changing rates, fees, or variable minimums, so treat the output as a close planning estimate.
Official sources
- U.S. Consumer Financial Protection Bureau: consumerfinance.gov.
- U.S. Securities and Exchange Commission: Investor.gov.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.