$25,500.00
Mar 2029
39 months
$2,632.07
$2,778.27
54 months faster
Credit Card
19.99% APR • Month 10
Oct 2026
Car Loan
6.5% APR • Month 22
Oct 2027
Student Loan
5.5% APR • Month 39
Mar 2029
Monthly Payment: $725.00($525.00 minimums + $200.00 extra)
Minimum Only
Snowball
Avalanche
BestHow the Debt Avalanche Method Works
1. Order by Rate
List all debts from highest to lowest interest rate, regardless of balance.
2. Attack High Interest
Pay minimums on all debts, then put all extra money toward the highest rate debt.
3. Maximize Savings
As debts are eliminated, roll payments to the next highest rate debt.
Frequently Asked Questions
What is the debt avalanche method?
The debt avalanche method prioritizes paying off debts with the highest interest rates first. This approach minimizes the total interest you pay over time, making it the mathematically optimal debt payoff strategy.
How is the avalanche different from the snowball method?
The avalanche orders debts by interest rate (highest first), while the snowball orders by balance (smallest first). Avalanche saves more money, but snowball provides faster psychological wins. Choose based on what motivates you.
How much money can the avalanche method save?
Savings depend on your specific debts. Typically, if you have high-interest credit card debt alongside lower-rate loans, the avalanche method can save hundreds or even thousands of dollars compared to other approaches.
When should I use avalanche vs snowball?
Use the avalanche if you're disciplined and motivated by saving money. Use the snowball if you need quick wins to stay engaged. Both methods are far better than making only minimum payments.
Track your debt payoff journey
Sign up for iBudget to track every payment, visualize your progress, and celebrate milestones on your path to financial freedom.