Minimize the interest you pay to banks.
When you are juggling multiple credit cards, personal loans, or student debts, deciding which one to pay off first can be overwhelming. The Debt Avalanche Method is a mathematically optimal financial strategy designed to save you the maximum amount of money. Unlike methods that focus on small balances, the Avalanche method strictly targets the debt with the highest Annual Percentage Rate (APR).
Interest is the penalty you pay for borrowing money. A smaller debt with a 25% interest rate is actively draining your wealth faster than a larger debt at a 5% interest rate. By using our calculator, you can compare your two primary debts. The strategy dictates that you continue making minimum payments on all your debts, but you channel every single extra dollar you have toward the balance with the highest interest rate. Once that "peak" is conquered, you take those funds and avalanche them down onto the next highest interest debt. It is the fastest path to becoming debt-free.
AI-generated estimates. No guarantee of accuracy. We assume no liability for decisions based on these results. Independent verification is recommended.