Debt Avalanche Calculator
Calculate how fast you can pay off debts using the avalanche method -- targeting the highest interest rate first.
Meses para Quitar
56 months
Months to Pay Off vs Total Monthly Payment
Formula
## Debt Avalanche Method The avalanche method pays off debts from **highest interest rate to lowest**, regardless of balance size. ### How It Works 1. Make minimum payments on all debts 2. Put all extra money toward the highest-rate debt 3. When that is paid off, roll the payment to the next highest rate 4. Repeat until debt-free ### Why Avalanche Wins Mathematically This method minimizes total interest paid. The formula uses the standard amortization equation solved for number of payments: **n = -ln(1 - B*r/P) / ln(1+r)**
Exemplo Resolvido
$30,000 total debt at 18% average rate, paying $800/month.
- 01Monthly rate = 18% / 12 = 1.5%
- 02Months = -ln(1 - $30,000 x 0.015 / $800) / ln(1.015)
- 03Months = -ln(0.4375) / ln(1.015) = 55.5 months (round to 56)
- 04Total paid = $800 x 56 = $44,800
- 05Total interest = $44,800 - $30,000 = $14,800
Perguntas Frequentes
Is the avalanche method better than the snowball?
Mathematically, yes. The avalanche method saves more money in interest. However, the snowball method (smallest balance first) provides quicker wins that can keep you motivated. Choose whichever you will stick with.
What if I cannot pay more than the minimums?
Even with minimum payments, focus extras on the highest-rate debt. Every extra dollar saves you the equivalent of that interest rate in return. Even $25-$50 extra per month makes a difference.
Should I stop investing while paying off debt?
If your debt interest rate exceeds your expected investment return (typically 7-10%), focus on debt payoff. Always contribute enough to get an employer 401(k) match -- that is a guaranteed 100% return.
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