The Avalanche Method: What It Is and Why It Matters
The debt avalanche method pays off debts from highest interest rate to lowest, regardless of balance. It minimises total interest paid and is the mathematically optimal repayment strategy.
Make minimum payments on all debts, then direct every spare dollar toward the highest-rate debt. Once eliminated, that payment rolls to the next highest rate.
Depending on your debts' balances and rates, the avalanche can save hundreds to thousands of dollars compared to snowball. The savings are most significant with high-balance, high-rate debt.
The challenge: if your highest-interest debt has a large balance, it may take many months before you eliminate it. This can be psychologically challenging for people motivated by visible progress.
The avalanche is best suited for analytically motivated people with strong financial discipline who are comfortable with a longer runway before the first payoff victory.
Many educators recommend a hybrid: use snowball to eliminate one or two small debts quickly for momentum, then switch to avalanche for the remaining balances.
Richify Tip
Richify's AI agents model the exact interest savings of avalanche versus snowball across your specific debts — so you can choose your strategy with full information.
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