Avalanche Method Debt Payoff Calculator
Use this calculator to see how much time and interest you can save by using the debt avalanche method. The avalanche method prioritizes paying off debts with the highest interest rates first, saving you the most money on interest over time.
Understanding the Debt Avalanche Method
The debt avalanche method is a debt repayment strategy where you prioritize paying off debts with the highest interest rates first, regardless of their balance. Once the debt with the highest interest rate is paid off, you take the money you were paying on that debt (its minimum payment plus any extra payments you were making) and apply it to the debt with the next highest interest rate. This process continues until all your debts are paid off.
How it Works:
- List all your debts: Include the current balance, interest rate, and minimum monthly payment for each.
- Order by interest rate: Arrange your debts from the highest interest rate to the lowest.
- Pay minimums on all debts: Make the minimum required payment on every single one of your debts.
- Apply extra funds to the highest interest debt: Take any additional money you can afford to put towards debt repayment and apply it exclusively to the debt at the top of your list (the one with the highest interest rate).
- Roll over payments: Once the highest-interest debt is completely paid off, take the money you were paying on that debt (its minimum payment plus any extra funds) and add it to the minimum payment of the next debt on your list.
- Repeat: Continue this process until all your debts are eliminated.
Why Choose the Avalanche Method?
- Saves the most money: By targeting high-interest debts first, you reduce the total amount of interest you pay over the life of your debts. This is the most mathematically efficient way to pay off debt.
- Faster payoff: While it might not feel as motivating initially as the snowball method (which targets smallest balances first), the avalanche method typically leads to a faster overall debt-free date because you're eliminating the debts that cost you the most money.
- Financial discipline: It encourages a disciplined approach to debt repayment, focusing on the long-term financial benefit.
Avalanche vs. Snowball Method:
The main alternative to the avalanche method is the debt snowball method. The snowball method prioritizes paying off debts with the smallest balances first, regardless of interest rate. While the snowball method can provide psychological wins by quickly eliminating small debts, the avalanche method is generally superior for saving money on interest. If you need quick motivation to stay on track, snowball might be a good start, but for maximum financial efficiency, avalanche is the way to go.
Tips for Success:
- Create a budget: Understand where your money is going to find extra funds for debt repayment.
- Cut expenses: Look for areas to reduce spending and free up more money for your additional payment.
- Increase income: Consider side hustles or asking for a raise to accelerate your debt payoff.
- Stay consistent: The key to any debt repayment strategy is consistency. Stick to your plan!
.avalanche-calculator-container {
font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif;
max-width: 800px;
margin: 20px auto;
padding: 25px;
background-color: #f9f9f9;
border-radius: 10px;
box-shadow: 0 4px 12px rgba(0, 0, 0, 0.1);
color: #333;
}
.avalanche-calculator-container h2,
.avalanche-calculator-container h3,
.avalanche-calculator-container h4 {
color: #2c3e50;
margin-top: 20px;
margin-bottom: 15px;
border-bottom: 1px solid #eee;
padding-bottom: 5px;
}
.calculator-inputs .input-group,
.calculator-inputs .debt-inputs {
background-color: #ffffff;
border: 1px solid #e0e0e0;
border-radius: 8px;
padding: 15px;
margin-bottom: 15px;
}
.calculator-inputs .debt-inputs h4 {
margin-top: 0;
color: #34495e;
border-bottom: none;
padding-bottom: 0;
}
.input-row {
display: flex;
flex-wrap: wrap;
align-items: center;
margin-bottom: 10px;
}
.input-row label {
flex: 1;
min-width: 150px;
margin-right: 10px;
font-weight: bold;
color: #555;
}
.input-row input[type="text"],
.input-row input[type="number"] {
flex: 2;
padding: 10px;
border: 1px solid #ccc;
border-radius: 5px;
font-size: 1em;
max-width: 250px;
}
.input-group .input-description {
font-size: 0.9em;
color: #777;
margin-top: 5px;
margin-left: 160px; /* Align with input fields */
}
button {
background-color: #28a745;
color: white;
padding: 12px 25px;
border: none;
border-radius: 5px;
font-size: 1.1em;
cursor: pointer;
transition: background-color 0.3s ease;
display: block;
width: fit-content;
margin: 20px auto 0 auto;
}
button:hover {
background-color: #218838;
}
.calculator-results {
background-color: #e9f7ef;
border: 1px solid #d4edda;
border-radius: 8px;
padding: 20px;
margin-top: 25px;
color: #155724;
}
.calculator-results h3 {
color: #155724;
border-bottom: 1px solid #c3e6cb;
padding-bottom: 10px;
margin-top: 0;
}
.calculator-results p {
margin-bottom: 8px;
line-height: 1.6;
}
.calculator-results strong {
color: #0f3d1a;
}
.calculator-results .highlight {
font-size: 1.1em;
font-weight: bold;
color: #007bff;
}
.calculator-results .savings {
color: #28a745;
font-weight: bold;
}
.calculator-article {
margin-top: 30px;
padding-top: 20px;
border-top: 1px solid #eee;
}
.calculator-article p, .calculator-article ul, .calculator-article ol {
line-height: 1.7;
margin-bottom: 10px;
}
.calculator-article ul, .calculator-article ol {
margin-left: 20px;
padding-left: 0;
}
.calculator-article li {
margin-bottom: 5px;
}
@media (max-width: 600px) {
.input-row {
flex-direction: column;
align-items: flex-start;
}
.input-row label {
min-width: unset;
margin-bottom: 5px;
}
.input-row input[type="text"],
.input-row input[type="number"] {
width: 100%;
max-width: 100%;
}
.input-group .input-description {
margin-left: 0;
}
}
function calculateAvalanche() {
var debts = [];
var additionalPayment = parseFloat(document.getElementById('additionalPayment').value);
if (isNaN(additionalPayment) || additionalPayment < 0) {
additionalPayment = 0;
}
for (var i = 1; i 0 && !isNaN(interestRate) && interestRate >= 0 && !isNaN(minPayment) && minPayment >= 0) {
debts.push({
name: debtName || 'Debt ' + i,
balance: balance,
interestRate: interestRate / 100, // Convert percentage to decimal
minPayment: minPayment
});
}
}
if (debts.length === 0) {
document.getElementById('result').innerHTML = 'Please enter at least one valid debt to calculate.';
return;
}
// — Current Plan Calculation (Minimum Payments Only) —
var currentPlanDebts = JSON.parse(JSON.stringify(debts)); // Deep copy
var currentPlanMonths = 0;
var currentPlanTotalInterest = 0;
var currentPlanActiveDebts = currentPlanDebts.filter(function(d) { return d.balance > 0; });
var maxMonthsLimit = 1200; // 100 years to prevent infinite loops
while (currentPlanActiveDebts.length > 0 && currentPlanMonths < maxMonthsLimit) {
currentPlanMonths++;
for (var j = 0; j 0; });
}
var currentPlanPayoffTime = formatMonths(currentPlanMonths);
if (currentPlanMonths >= maxMonthsLimit && currentPlanActiveDebts.length > 0) {
currentPlanPayoffTime = "More than 100 years (some debts not paid)";
}
// — Avalanche Plan Calculation —
var avalancheDebts = JSON.parse(JSON.stringify(debts)); // Deep copy
var avalancheMonths = 0;
var avalancheTotalInterest = 0;
var avalancheActiveDebts = avalancheDebts.filter(function(d) { return d.balance > 0; });
var totalMinPayments = avalancheDebts.reduce(function(sum, d) { return sum + d.minPayment; }, 0);
var totalPaymentPerMonth = totalMinPayments + additionalPayment;
while (avalancheActiveDebts.length > 0 && avalancheMonths < maxMonthsLimit) {
avalancheMonths++;
var paymentPool = totalPaymentPerMonth;
// 1. Apply interest for the current month
for (var k = 0; k < avalancheActiveDebts.length; k++) {
var debt = avalancheActiveDebts[k];
var interest = debt.balance * (debt.interestRate / 12);
debt.balance += interest; // Balance now includes interest
avalancheTotalInterest += interest;
}
// 2. Pay minimums on all debts, and subtract from payment pool
for (var l = 0; l < avalancheActiveDebts.length; l++) {
var debt = avalancheActiveDebts[l];
var paymentAmount = Math.min(debt.balance, debt.minPayment); // Payment should not exceed the new balance
debt.balance -= paymentAmount;
paymentPool -= paymentAmount;
}
// 3. Apply remaining payment pool to highest interest debts
avalancheActiveDebts.sort(function(a, b) { return b.interestRate – a.interestRate; }); // Sort highest interest first
for (var m = 0; m < avalancheActiveDebts.length; m++) {
var debt = avalancheActiveDebts[m];
if (paymentPool 0; });
}
var avalanchePayoffTime = formatMonths(avalancheMonths);
if (avalancheMonths >= maxMonthsLimit && avalancheActiveDebts.length > 0) {
avalanchePayoffTime = "More than 100 years (some debts not paid)";
}
// — Display Results —
var resultDiv = document.getElementById('result');
var savingsMonths = currentPlanMonths – avalancheMonths;
var savingsInterest = currentPlanTotalInterest – avalancheTotalInterest;
var output = '
Your Debt Payoff Results
';
output += '
Current Plan (Minimum Payments Only)
';
output += 'Total Payoff Time:
' + currentPlanPayoffTime + '';
output += 'Total Interest Paid:
$' + currentPlanTotalInterest.toFixed(2) + '';
output += '
Avalanche Method (with $' + additionalPayment.toFixed(2) + ' extra per month)
';
output += 'Total Payoff Time:
' + avalanchePayoffTime + '';
output += 'Total Interest Paid:
$' + avalancheTotalInterest.toFixed(2) + '';
if (savingsMonths > 0 || savingsInterest > 0) {
output += '
Your Savings with Avalanche Method
';
output += 'Time Saved:
' + formatMonths(savingsMonths) + '';
output += 'Interest Saved:
$' + savingsInterest.toFixed(2) + '';
} else if (additionalPayment > 0) {
output += '
Your Savings with Avalanche Method
';
output += 'No significant savings calculated. This might happen if your additional payment is very small relative to your debts, or if all debts have similar interest rates.';
} else {
output += '
Your Savings with Avalanche Method
';
output += 'Enter an "Additional Monthly Payment" to see potential savings with the Avalanche Method.';
}
resultDiv.innerHTML = output;
}
function formatMonths(totalMonths) {
if (typeof totalMonths !== 'number' || isNaN(totalMonths) || totalMonths < 0) {
return "N/A";
}
var years = Math.floor(totalMonths / 12);
var months = Math.round(totalMonths % 12); // Round to nearest month
if (years === 0 && months === 0) {
return "0 months";
} else if (years === 0) {
return months + " month" + (months !== 1 ? "s" : "");
} else if (months === 0) {
return years + " year" + (years !== 1 ? "s" : "");
} else {
return years + " year" + (years !== 1 ? "s" : "") + " and " + months + " month" + (months !== 1 ? "s" : "");
}
}