The debt avalanche method: Learn how it works

Discover how to pay off debt faster and save on interest with the practical debt avalanche method. Learn how this simple strategy can help you get out of debt quickly.


Learn to tackle your debt efficiently and quickly with this payoff strategy

Pay your debt efficiently with this method. Source: Canva.

If you’re looking for the most cost-effective way to pay off your debt, then the debt avalanche method may be just what you need.

The Debt Avalanche is a powerful and proven strategy that can help you become debt-free faster than other traditional methods — without putting added strain on your finances or lifestyle.

Below, we’ll take a closer look at the debt avalanche strategy and show you how it works. That way you can make an informed decision when it comes to freeing yourself from overwhelming debts.

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What exactly is the debt avalanche method?

The debt avalanche method is one of many payoff strategies. It works by having you compare your debt accounts and pay the ones with the highest interest rate first.

It’s a simple but effective way to maximize your debt payoff speed over time, as paying off high-interest debt earlier can save you a lot of money.

With this strategy, you can focus on one large debt at a time, and once you’ve paid off one debt account in full, you move on to the debt with the next-highest interest rate.

This method works best if interest rates vary significantly between debts and if you have several debt accounts that need to be paid off.

In addition, it is important to keep making payments on your other debt accounts at their minimum amounts while concentrating most of your debt payoff efforts on the highest-interest debt.

The debt avalanche method requires a lot of financial discipline, but allows you to save money in the long run and work your way out of debt faster. 

Debt avalanche method versus debt snowball method

This is one of the best methods to eliminate your debts once and for all. Source: Canva.

As we mentioned above, the debt avalanche method is a debt repayment strategy that prioritizes debt from the highest to lowest interest rate.

The idea behind this approach is that you’ll save more money in the long run by minimizing the amount of interest you pay on your debt.

This strategy also encourages a disciplined approach to debt repayment since it suggests tackling debt one at a time.

The debt snowball method, on the other hand, is the exact opposite. It prioritizes debt from the smallest rates first and the highest ones last. 

It encourages discipline by helping people stay motivated and focused on paying off debt one by one.

The debt snowball method often works well for those who need a sense of accomplishment in order to stay motivated when tackling debt.

Potential pros and cons to this payoff strategy

While the debt avalanche method is a solid strategy to save money, there are potential drawbacks as there are benefits to it. See them next. 


  • This method helps you save money in the long run, as it reduces total interest paid on debt.
  • It can keep you motivated as you see the debt getting smaller with each payment. 
  • It helps you stay organized and on track with their debt payments.


  • This debt repayment method requires a lot of planning and discipline to stick to it in order to be successful.
  • It can be difficult to stay motivated and continue making debt payments when you see little or no progress in your debt repayment.
  • Keeping up with this strategy may be discouraging since it may take longer to see results. 

The debt avalanche method isn’t for everyone, but it can certainly help debtors pay off debt faster and with fewer interest payments. It’s important to do your research and consider both the pros and cons before choosing which debt repayment method is best for you.

How to efficiently apply the debt avalanche method

If you believe the debt avalanche method is the best strategy to help you get rid of debt, there are more efficient ways you can approach it. 

Step one: list all of your current debts

To pay your debts, you’ll need organization, discipline, and a good method! Source: Canva.

To start using the debt avalanche method, you need to list all your debts from highest interest rate to lowest interest rate.

Once you understand the order of debt payments, you can begin paying down debt with the highest interest rates first.

Try using a spreadsheet and make sure to include all debts – from credit cards to student loans. 

Step two: create a budget

A budget is the foundation of any debt reduction strategy – without one, it’s hard to determine exactly how much you can realistically pay towards debt every month.

Allocate your monthly income against necessary expenses, savings and debt payments.

Having clarity on where your money is going will allow you to see how fast you can make progress on paying off debt with the debt avalanche method.

Step three: pay more than the minimum amount

With the debt avalanche method, any extra payments you make should be added to the debt balance with the highest interest rate – not just minimum payment amounts.

This way, more of each payment goes towards reducing your principal balance and less of it goes towards interest rates.

It may take a bit longer than other debt repayment strategies, but it will save you money in the long run!

Step four: Increase your payments as you reduce your debt

As soon as you’re able to pay off your highest interest debt, take the extra money that you were putting towards it and apply it to the debt with the next highest interest rate.

This compound interest helps you pay off debt quicker and ensures that your payments are having the most impact on your debt total.

As you knock out debts one by one, you’ll end up freeing up more and more cash each time, enabling you to make even larger payments towards subsequent debt payoffs.

Allowing your extra payments to grow as debt decreases might help put an end to debt faster than anticipated.

Learn ways to consolidate your credit card debt

Credit card debt can be a stressful and sometimes even debilitating situation, but there are solutions available to help you reduce or consolidate your payments.

In the following link, we will discuss some of the different ways you can go about consolidating and getting rid of high-interest credit card debt.

We’ll talk through all of the options so that you can make an informed decision when it comes to managing what is likely one of your biggest expenses. Read on!

Consolidate Credit Card Debt

Different ways you can consolidate your debt

If you're struggling to pay off your credit card debt, there are several ways to consolidate it. Learn about the options available to you and get back on track.

About the author  /  Aline Barbosa

Aline Barbosa is an editor, writer and learning-enthusiast. Passionate about music, books and human behavior. Curious about the unknown. Believer that learning is a life-long process.

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