Debt Avalanche Calculator
The avalanche pays the highest interest rate first. It is the cheapest possible order — provably so — and this shows both what it saves and where its weakness lies.
On this page
Why highest-rate-first is optimal
Interest accrues on each balance at its own rate. A dollar removed from a 27% debt cancels 27 cents of annual interest; the same dollar removed from a 7% debt cancels seven. Directing every spare dollar at the highest rate therefore removes the most future interest per dollar spent, at every moment.
That argument holds regardless of balances, minimums, or how many debts there are. No ordering can beat it on total interest, which is why the avalanche is the cheapest plan available and why the calculator reports the gap against the snowball rather than treating the two as equally valid.
Where it goes wrong
Not in the arithmetic. In the months where nothing visible happens.
If the highest-rate debt is also the largest, the first year of an avalanche can pass without a single debt disappearing. Every statement still arrives, and the progress is real but invisible. That is where plans get abandoned, and abandoning the cheapest plan costs more than choosing the second-cheapest one.
The results panel shows what the snowball would cost so the comparison is explicit. Sometimes the gap is small enough that buying an early win is a sensible purchase.
The rolling payment
The mechanism is the same one the snowball uses, and it is the part that does the heavy lifting in either method. Pay minimums everywhere, put everything spare on the target, and when the target clears, add its minimum to the spare amount and move to the next.
By the last debt the payment is the sum of every minimum plus the original extra. A plan that starts with $300 of extra can be attacking the final debt with $1,000 a month, which is why the tail of the plan is so much faster than the start.
Rates matter more than balances here
Since the ordering is by rate, getting the rates right is the input that matters. Two things worth checking on your statements: whether a promotional rate is about to expire, and whether a card carries different rates for purchases and cash advances.
A 0% balance transfer reverting to 24.99% in four months belongs near the front of the queue even though its current rate suggests the back. Nothing on this page can know that; you have to model it by entering the rate you will actually face.
A worked example
The same four debts: a $1,250 store card at 26.99%, a $6,400 card at 22.49%, a $13,800 car loan at 7.4%, and a $4,200 personal loan at 13.5%, with $300 a month extra.
The avalanche order is store card, card, personal loan, car loan. Total interest is about $3,920 over roughly two years and four months. The snowball order — which swaps the card and the personal loan — costs about $180 more over the same period.
A $180 gap on $25,650 of debt is small, and here the two methods even agree on the first target, since the store card is both the smallest and the most expensive. When those two properties diverge the gap widens sharply — try raising the largest debt's rate and watch it grow.
What this does not model
- New spending. The model assumes nothing is added to the balances.
- Variable rates. Card APRs move with the prime rate, and the model holds them fixed.
- Falling minimums. Held constant here, which is slightly optimistic for revolving debt.
- Tax-deductible interest. Student loan interest may be partly deductible, which lowers its effective rate and can change the ordering.
- Credit score effects. Utilisation on individual cards affects your score, and clearing a small card entirely can help more than reducing a large one.
See the snowball version for the same debts in balance order, and the APR calculator for what a rate really means once fees are counted.
Frequently asked questions
How much does the avalanche actually save?
It depends entirely on the spread between your rates and the sizes of the balances. On a set of similar cards the difference is often a few hundred dollars; where a large debt carries the highest rate it can be thousands.
The results panel gives the figure for your debts rather than a general claim.
Should I pay off a small debt first anyway?
If the cost of doing so is small and it keeps you going, that is a rational purchase rather than a mistake. The calculator prices it.
A middle route works for some people: clear one small debt for the momentum, then run the avalanche on everything else.
What if two debts have the same rate?
The calculator breaks the tie with the smaller balance first, which clears one debt sooner at no additional cost.
At equal rates the ordering genuinely does not affect the total interest, so the tie-break is free.
Do I include the minimum payment for a debt I am attacking?
Yes. Every debt receives its minimum every month, and the target additionally receives everything left over. Skipping a minimum would trigger fees and penalty rates that dwarf any saving.
That is how the simulation works, and it is how the method is meant to be run.
Is it worth transferring a balance to a 0% card?
Often, if the transfer fee is smaller than the interest avoided and you will clear the balance before the promotional rate ends.
Model it by entering the post-promotional rate you would face if you do not clear it in time — that is the realistic case rather than the advertised one.
Should I invest instead of paying off debt?
Paying off a 24% card is a guaranteed 24% return, which no investment offers with any certainty. Below about 6% the comparison becomes genuinely arguable.
The exception in both directions is an employer retirement match, which is an immediate return worth capturing before almost anything else.
Related calculators
This calculator is provided for general educational and estimation purposes only and is not financial or debt advice. It assumes no new spending, no fees, and no rate changes. If the minimum payments are already unaffordable, a non-profit credit counselling agency can help with options no calculator covers.