Debt avalanche calculator

How the avalanche works

The debt avalanche is the mathematically optimal payoff order: pay the minimum on every debt, then put all extra money toward the highest-rate debt first. When that one is gone, its entire payment rolls into the next-highest-rate debt - an accelerating cascade. Because you always attack the most expensive interest first, you pay the least total interest and finish soonest. This calculator simulates it month by month.

Worked example

Three debts and $500 a month extra:

• Credit card: $15,000 at 22%, $300 minimum
• Personal loan: $8,000 at 9%, $150 minimum
• Auto loan: $20,000 at 6%, $250 minimum

The avalanche attacks the 22% card first:

• Debt-free in: about 43 months (3.6 years)
• Total interest paid: about $8,071

Paying minimums alone would take far longer and cost thousands more in interest - the extra $500, focused on the highest rate, does the heavy lifting.

Avalanche versus snowball

• Avalanche (highest rate first): lowest total interest, fastest payoff - the best math.
• Snowball (smallest balance first): slightly more interest, but quick early wins that keep some people motivated.

If you will stick with either, the avalanche saves the most money. If you need momentum to stay on track, the snowball is a fine trade.

How to go faster

• Increase the extra payment - even small additions compound through the cascade.
• Stop adding new debt while you pay down the old.
• Target the highest rate, which is usually a credit card or HELOC, before lower-rate loans.

Common mistakes

• Spreading extra payments evenly instead of concentrating on the top rate.
• Closing paid-off accounts in a way that dents your credit score.
• Neglecting an emergency fund, then reaching for new high-rate debt in a pinch.

For a high-rate line specifically, see the HELOC payoff calculator; to see how the freed-up payments could build wealth afterward, use the savings rate calculator.