Debt Avalanche Method
A payoff strategy that targets your highest interest rate first to minimize total interest.
What does debt avalanche method mean?
You pay minimums on everything and direct extra at the highest-rate debt; when it’s cleared, its payment rolls down to the next. It’s the mathematically cheapest route to becoming debt-free.
Put it to use
Related terms
Debt Avalanche Method — frequently asked
How does the debt avalanche method work?
You pay minimums on all debts and direct every extra dollar at the highest interest rate first. Once it is cleared you move to the next-highest rate, minimizing the total interest you pay across the payoff.
Is the avalanche always better than the snowball?
Mathematically yes — it clears the costliest debt first and saves the most interest. Behaviorally, not always: the snowball’s early wins keep some people motivated enough to finish, which beats an optimal plan you abandon.