How this calculator works
The avalanche method ranks your debts by interest rate and sends every spare dollar to the highest one. All minimums are still paid on time, so no account falls behind and no late fee appears. When the top-rate debt is cleared, its minimum joins the pool and the next highest rate becomes the target, which is why the plan accelerates as it goes. Mathematically this ordering always costs the least interest, because the most expensive dollar of debt is repaid first. The trade-off is motivation: if your highest rate sits on a large balance, it can be many months before any account closes. Interest is charged monthly at one twelfth of each annual rate, and the model assumes no new borrowing, no fees and no promotional rates.
Formula
Each month: interest on debt d = balance_d × rate_d / 12; the minimum payment p_d reduces the balance. Pool = extra payment + any minimum freed because a balance is nearly clear. The pool pays the highest-rate debt with a balance, then the next highest when that debt reaches zero. Repeat until every balance is zero. Total interest is the sum of monthly interest across all debts.
Worked example
Three debts of $2,000 at 4.9%, $6,000 at 19.99% and $15,000 at 7.5% carry $600 of minimum payments and $23,000 in total. Adding $100 a month under the avalanche method targets the 19.99% card first: it clears in month 31, the small loan clears in month 21 on its own minimum, and the plan finishes in 46 months with $4,235.25 of interest. The snowball method on the same debts finishes in 47 months and costs $4,824.96, so the avalanche saves $589.71 here while giving up the early win.
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Frequently asked questions
What is the difference from the snowball method?
The snowball pays the smallest balance first for a quick win; the avalanche pays the highest rate first for the lowest total interest. When the smallest balance also carries the highest rate the two orders coincide, which is common with small, high-rate cards.
Does the extra payment have to be large?
No. Any amount above the minimums helps, and freed minimums keep adding to it. Even a small surplus compounds over the life of the plan because each cleared balance releases its own minimum.
What if two debts have the same rate?
The order between them does not change the total interest. This calculator breaks the tie by input order, so the result is still deterministic.
Should I include a mortgage?
You can enter any debt with a fixed minimum, but a mortgage minimum mostly covers interest on a large balance. Mixing it in can bury the effect on the consumer debts you can realistically clear first.