Finder may earn compensation from partners, but editorial opinions are our own. Advertiser Disclosure

Debt avalanche calculator

Save by paying off your highest-interest debts first.

The debt avalanche method is a popular way to pay off large amounts of debt. By tackling your highest-interest debts first, you can reduce the total amount of interest you pay — saving you big in the long run.

How is the debt avalanche method calculated?

The debt avalanche method is calculated by ordering your debts from highest interest rate to lowest. After making the minimum payment on all of your debts each month, you then put any leftover money toward your highest-interest debt first. Once that’s paid off, you put that minimum payment and any extra money toward your next highest-interest debt, and so forth, until all of your debts have been repaid.

Follow these steps to calculate the order you should repay your debts using the debt avalanche method:

  1. Create a budget to determine your cash flow. Figure out how much money you have coming in each month and how much you need for your monthly bills — including the minimum payments to your creditors. If you can cut back on things like a cable subscription or daily coffee, you’ll increase your cash flow and have more money left over to put toward your debts.
  2. List out all of your debts and the minimum monthly payments. For every debt, list your balance, interest rate and minimum payment. This gives you an overview of how much you owe and help you determine which debt to tackle first.
  3. Order your debts from highest interest rate to lowest. The higher the interest rate, the more that debt will cost you in the long run.
  4. Prioritize the most expensive debt. Once you have your debts in order, put any extra cash each month toward the credit card or loan with the highest interest rate. Even $50 over the minimum monthly payment will help pay it off sooner, so there’s no amount too small.
  5. Increase extra payments as debts are eliminated. After you’ve paid off your first loan or credit card, keep the avalanche going by applying your excess monthly cash and your paid-off debt’s monthly payment toward your second most-expensive debt — and so on.

The total time it takes to completely pay off your debts will depend on how much you owe, your cash flow and your ability to stick to a budget.

How to calculate your debt avalanche

The debt avalanche method in action

Let’s take a look at an example: Catherine is a single woman in her early 30s and has finished paying off her federal student loans for her undergraduate degree.

The amount she can spend on her debts each month is $500. She has two credit cards, a car loan and a personal loan. She’s decided to use the debt avalanche method to save on interest in the long run and open up room in her budget for a mortgage payment down the road.

DebtBalanceMinimum paymentAPR
Credit Card A$1,500$4518.99%
Credit Card B$4,000$8015.45%
Personal Loan$3,000$7013.1%
Car Loan$5,000$1206.99%

As you can see, her car loan takes up the majority of her monthly budget, but it’s the two credit cards that are actually the most costly when you order things based on APR.

Since Catherine has $500 to put toward paying off her debts each month, she’d make the minimum monthly payment for each bill — totaling $315 — then put the remaining $185 toward Credit Card A until it’s fully paid off.

After, Catherine would tackle Credit Card B by combining that $185 with the $45 monthly payment for Credit Card A she no longer has, then repeat the process until all of her debts are paid off.

Bottom line

Although it takes a lot of discipline, it’s possible to become debt free and save on interest in the process by using the debt avalanche method. Learn more by reading our debt avalanche method guide.

Or compare it to the debt snowball method to find the best strategy for you.

Compare solutions to pay off your debt

Name Product Filter Values APR Min. Credit Score Loan Amount
BHG personal loans
$20,000 - $200,000
A highly-rated lender with quick turnaround and reliable customer service.
Credible personal loans
2.49% to 35.99%
Fair to excellent credit
$600 - $100,000
Get personalized rates in minutes and then choose an offer from a selection of top online lenders.
Best Egg personal loans
5.99% to 29.99%
$2,000 - $50,000
A prime online lending platform with multiple repayment methods.
PenFed Credit Union personal loans
5.99% to 17.99%
$600 - $50,000
With over 80 years of lending experience, this credit union offers personal loans for a variety of expenses.
SoFi personal loans
4.99% to 19.63%
$5,000 - $100,000
A highly-rated lender with competitive rates, high loan amounts and no fees.

Compare up to 4 providers

Name Product Amount saved Balance transfer APR Balance transfer fee Minimum Credit Score Filter values
Citi® Diamond Preferred® Card
0% intro for the first 21 months (then 13.74% to 23.74% variable)
$5 or 5% of the transaction, whichever is greater

Best of Finder 2021

An impressive 21 months intro APR on balance transfers and purchases, as well as no annual fee make this one of the top 0% APR cards available.
Citi Simplicity® Card
0% intro for the first 21 months (then 14.74% to 24.74% variable)
$5 or 5% of the transaction, whichever is greater
With an intro APR of 21 months, this card has one of the longest balance transfer offers on the market. Plus, no late fees and no annual fee.
Citi® Double Cash Card
0% intro for the first 18 months (then 13.99% to 23.99% variable)
$5 or 3% of the transaction, whichever is greater
Get a strong 18 month 0% intro APR on balance transfers AND up to 2% back. This is a rare card that offers both rewards and balance transfers.

Compare up to 4 providers

Frequently asked questions

How do I know which debt to pay off first?

The first debt you pay off should be the one with the highest interest rate.

For example, a short-term loan with a high APR and numerous fees would likely be the first to go, followed by expensive credit cards and personal loans. Rent-to-own contracts and pricey car loans would also be on the list.

Make your decision based on how much the debt is costing you every month. The more you’re spending on interest and fees, the sooner you should pay it off.

What if my debt is already in collections?

If your debt is in collections, call to see if you can negotiate a lower payoff amount. In some cases, if you can offer a percentage of the debt, a collection agency might take it and write off the rest.

However, it all depends on how much you owe, how much you can pay and the collection agency itself. If it won’t accept negotiations, you might want to contact a professional for help. Otherwise, add it to your list of debts to pay off using the debt avalanche method.

More guides on Finder

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site