Debt avalanche
The debt avalanche method orders debts by interest rate, with extra payment directed to the highest APR balance first.
What this page covers
This explainer is designed to show what the option is, how the basic mechanics work, and which details people commonly compare before looking at providers, products, or tools.
- Plain-English steps for how debt avalanche works.
- A simple example that shows the moving parts without selecting a product.
- Comparison factors, calculators, and source links for deeper research.
How it works
List each debt with its balance, APR, and required minimum payment.
Pay at least the minimum due on every account.
Apply any extra payment to the account with the highest APR.
When that debt is paid off, redirect its payment amount to the next-highest APR debt.
Simple example
A person has three card balances and $200 per month available beyond minimum payments.
The method focuses on interest rate order. It does not change creditor terms or reduce required minimum payments by itself.