Your strategic plan to conquer debt and build financial freedom.
Feeling overwhelmed by debt is common, but creating a clear plan is the most powerful step you can take toward financial freedom. This Debt Avalanche Calculator is designed to be your strategic partner. By focusing your efforts on high-interest debts first, you can save a significant amount of money and shorten your repayment timeline. Let's build your personalized plan and turn your financial goals into a reality.
The power of the debt avalanche lies in pure mathematics. By targeting your highest-interest debt first, you are systematically eliminating the debt that costs you the most money each month. This approach minimizes the total amount of interest you'll pay over the life of your loans, which means more of your money goes toward the principal balance. While it might take longer to pay off your first debt compared to the snowball method, the long-term savings are often substantial, helping you become debt-free faster and at a lower overall cost.
Choosing a debt repayment strategy is a personal decision. Here's a quick comparison to help you decide:
The debt avalanche is a repayment strategy where you make minimum payments on all your debts, but put any extra money toward the debt with the highest interest rate. Once that debt is paid off, you 'avalanche' that entire payment amount (minimum + extra) onto the next-highest-interest debt. This method saves you the most money in interest over time.
This calculator assumes fixed interest rates. If your rate changes, you can simply update the interest rate field for that debt and recalculate your plan to see the updated timeline.
That's great! You can apply that lump sum directly to the principal of your current target debt (the one with the highest interest rate). Then, update the balance in the calculator and recalculate to see how much faster you'll become debt-free.