Debt Avalanche Calculator
Model the debt avalanche method on two debts: pay the highest-APR balance first to minimize interest, and see months to payoff and total interest.
How to use this tool
- Enter each debt's balance and APR.
- Enter the total monthly budget you can put toward both debts.
- The calculator attacks the highest-APR debt first, then rolls onto the next.
- Read the months to clear both debts and the total interest paid.
Model the debt avalanche method on two debts. The avalanche targets the highest APR first to minimize total interest. See months to payoff and total interest.
Formula
Each month every debt accrues interest at its own monthly rate (APR ÷ 12). The total budget then pays interest and reduces principal, directing all available money to the highest-APR balance first.
When the highest-rate debt is cleared, its money rolls onto the next highest rate.
Total interest is the sum of interest accrued until both debts reach zero.
How it works
The debt avalanche method orders debts from the highest interest rate to the lowest and directs every spare dollar at the highest-APR balance first, paying only the interest on the rest. Because the most expensive debt shrinks fastest, the avalanche minimizes the total interest you pay and, in most cases, clears all debt at least as fast as any other order. This calculator models two debts: each accrues interest at its own monthly rate, then the budget is applied highest-rate-first until both are clear.
The avalanche is mathematically optimal for interest cost, but it can feel slower when the highest-rate debt also has a large balance, since the first payoff takes longer. That is the trade-off against the snowball method, which front-loads quick wins. As with any payoff plan, the monthly budget must exceed the combined interest, or the balances never fall; the tool flags that case.
Reviewed by the AbraCalc Credit Desk. This is general information, not financial advice; confirm your card's terms (APR, fees, minimum-payment rule) with your issuer or a qualified advisor.
Worked example
$500 at 24% and $1,000 at 12%, $800/month budget
- Month 1 interest: 500 × 2% = 10 and 1,000 × 1% = 10, total 20.
- Pay $800: clear the 24% debt ($510) and put $290 on the 12% debt, leaving $720.
- Month 2 interest: 720 × 1% = 7.20; pay $800, clearing the remaining balance.
- Total interest = 10 + 10 + 7.20 = 27.20; total paid = 1,500 + 27.20 = 1,527.20.
Months to pay off both = 2, total interest = $27.20
Avalanche vs snowball ordering
| Method | Pays first | Optimizes for |
|---|---|---|
| Avalanche | Highest APR | Lowest total interest |
| Snowball | Smallest balance | Fastest first win / motivation |
| Either (equal APRs) | Smallest balance | Same interest, faster first payoff |
Key terms
- Debt avalanche
- A payoff strategy that targets the highest interest rate first to minimize total interest.
- Annual percentage rate (APR)
- The yearly cost of borrowing; the monthly rate used here is APR ÷ 12.
- Monthly budget
- The total amount directed at all debts each month, covering interest plus principal.
- Avalanche vs snowball
- Avalanche orders by highest APR to save the most interest; snowball orders by smallest balance for motivation.
Frequently asked questions
- Why does the avalanche save the most interest?
- By eliminating the highest-rate balance first, you stop the most expensive interest from accruing as quickly as possible, which minimizes the total interest paid across all debts.
- Is the avalanche always faster than the snowball?
- It is at least as fast and usually cheaper in interest, but if the highest-rate debt also has a large balance, the first payoff can feel slower than the snowball's quick wins.
- What if two debts have the same APR?
- Then the order does not change total interest. Many people break the tie by paying the smaller balance first to get a faster first win.