Debt Avalanche Method

The debt avalanche method is a mathematically optimal debt repayment strategy where you make minimum payments on all debts while directing extra payments toward the debt with the highest interest rate. Once that debt is eliminated, the freed-up payment amount rolls to the next highest-rate debt, creating an accelerating payoff cascade. This approach minimizes total interest paid and reduces the overall time to become debt-free compared to other methods. While financially superior to the debt snowball method, the avalanche approach requires discipline since the highest-rate debt may have a large balance that takes longer to eliminate, potentially reducing the psychological motivation of early wins.