Debt Avalanche Payoff Planner
The debt avalanche method directs your extra cash to the debt with the highest annual percentage rate (APR), while paying minimums on all other debts. This is the mathematically optimal payoff order: because high-APR debt accumulates interest fastest, eliminating it first minimizes total interest paid over time. Enter up to four debts with their balances, APRs, and minimum payments, plus the total monthly amount you can put toward debt. The calculator ranks by APR, simulates month-by-month payoff, rolls freed payments forward, and shows total months and interest paid.
Enter up to 4 debts (leave unused rows at 0).
| Debt | Balance ($) | APR (%) | Min Payment ($) |
|---|---|---|---|
| 1 | |||
| 2 | |||
| 3 | |||
| 4 |
Debt avalanche method
Sort debts highest APR first. Each month: accrue interest = balance * (APR/12/100). Pay minimums on all debts. Apply extra payment to highest-APR balance. When paid off, roll that minimum into the extra payment for the next debt.
The avalanche method minimizes total interest by reducing the highest-cost debt fastest. It is the optimal strategy for anyone who can stay disciplined without early wins.
Why APR order matters
A debt at 22% APR costs more than twice as much per dollar as one at 10% APR. Every dollar paid toward the 22% debt saves 22 cents per year in perpetual interest, versus 10 cents on the lower-rate debt. The avalanche order maximizes this savings rate, reducing total interest paid compared to any other payoff sequence.
Frequently asked questions
What is the debt avalanche method?
The debt avalanche method directs all available extra money to the debt with the highest APR while paying minimum amounts on all other debts. When the highest-APR debt is paid off, you roll that freed payment to the next highest-APR debt. This method minimizes total interest paid.
How does the avalanche compare to the snowball method?
The avalanche method minimizes total interest cost and is mathematically optimal. The snowball method (paying smallest balance first) provides psychological wins by eliminating debts faster but typically costs more in total interest. The CFPB recommends choosing the method you will stick with.
What does rolling the payment mean?
When a debt is fully paid off, instead of spending that freed-up payment, you add it on top of the minimum payment for the next target debt. This accelerates payoff without increasing your total monthly commitment.
Should I include all debts in the avalanche plan?
Yes. Include every debt: credit cards, personal loans, auto loans, and medical bills. Exclude mortgage (typically low rate and tax-deductible). Order all debts from highest to lowest APR and target them sequentially.
Does making minimum payments first cause problems?
Paying minimums on lower-APR debts while attacking the highest-APR debt is correct avalanche strategy. Missing any minimum payment can trigger penalty rates, late fees, and credit score damage. Always pay at least the minimum on every account.
Official sources
- CFPB: Paying Off Credit Card Debt.
- Federal Reserve Consumer Credit G.19: Consumer Credit Release.
Reviewed by the CalculatorHub team, edited by James Graham, 15 June 2026. See our methodology.