What is the debt avalanche method?
The debt avalanche method is a repayment strategy where you pay the minimum on every debt, then put any extra repayment money towards the debt with the highest APR first.
Debt avalanche quick reference
Debt avalanche explained in plain English
The debt avalanche method is built around cost saving. Instead of choosing the smallest balance first, you choose the debt with the highest APR. The reason is simple: the highest APR debt is usually the most expensive debt to keep.
You still make the minimum payment on every debt. That keeps accounts from becoming late or missed. Any extra repayment money then goes to the highest-APR debt until it is cleared. After that, the extra payment moves to the next highest APR.
The main benefit is that avalanche is usually the most efficient method mathematically. It can reduce the total interest paid because it attacks the most expensive balance first.
The trade-off is motivation. If the highest-APR debt has a large balance, it may take a while before the first account is cleared. Some people find that harder to stick with than the quick wins of the debt snowball method.
How the debt avalanche method works
- List every debt. Include the balance, APR and minimum payment.
- Sort by APR. Put the highest APR first, regardless of balance size.
- Pay minimums on all debts. Keep every account up to date.
- Attack the highest APR debt. Put all extra repayment money towards it.
- Roll the payment forward. When the first debt is cleared, move the extra payment to the next highest APR.
- Repeat until clear. Continue until all debts are gone.
Compare avalanche with snowball
Use the debt snowball calculator to compare the highest-APR-first route with the smallest-balance-first route.
Simple debt avalanche example
Imagine you have three debts and £100 extra per month to put towards repayment.
| Debt | Balance | APR | Minimum payment | Avalanche order |
|---|---|---|---|---|
| Store card | £450 | 34.9% | £20 | 2nd |
| Overdraft | £900 | 39.9% | £30 | 1st |
| Credit card | £2,500 | 24.9% | £60 | 3rd |
Avalanche starts with the overdraft because it has the highest APR. Once that is cleared, the extra repayment moves to the store card, then the credit card. This may save more interest than clearing the smallest balance first.
Debt avalanche vs debt snowball
Avalanche is often the best route if your goal is to minimise the total cost of credit. Snowball may be better if visible progress helps you stay committed.
Read the full comparison
See when snowball or avalanche may be better depending on your balances, APRs and motivation.
When debt avalanche can help
- You want to reduce interest: avalanche targets the most expensive debt first.
- APR differences are large: a very high APR debt can cost a lot if left until later.
- You can stay consistent: avalanche works best if you can follow the numbers without needing quick wins.
- You have expensive credit cards or overdrafts: these may be good candidates for highest-APR-first repayment.
- You are comparing repayment strategies: avalanche gives a useful benchmark for lowest-interest repayment.
Debt avalanche risks
The main risk is motivation. If the highest-APR debt is large, it may take a long time to clear the first account. That can make the plan feel slow even when it is working.
Another risk is ignoring practical pressure. If a small debt is causing stress or admin problems, clearing it first may be worth considering even if avalanche is mathematically cheaper.
Watch out: the cheapest method is only useful if you can stick with it. A slightly less efficient plan that you complete can be better than a perfect plan you abandon.