The debt avalanche method: what it is and how to use it

Learn what is the debt avalanche method and how to use it! Pay-off your debt quickly! Keep reading and find out how!


by José Gonçalo

01/03/2023 | Updated on 01/26/2023

How the debt avalanche method can help you pay off debt fast

Debt Avalanche - Finance/Economy. Folder on desk with label besi
Learn the debt avalanche method. Source: Adobe Stock

It doesn’t matter how you got into debt. What matters now is leaving the negative marks on your credit history behind. How to do this? The debt avalanche method can be a solution.

happy businessman holding golden key after unlock debt burden chain.

Debt elimination plan

There is a simple way to get rid of your debts and prevent them from returning one day: get to know a good debt elimination plan in 6 steps!

See the review below and find out how to apply this method that has already saved many families from being “covered” by debt. Understand below!

What is the debt avalanche method and how does it work?

Many people “freeze” when faced with a pile of debt. Even if they have the resources to pay for part of them, they may have doubts about where to start and whether they are making the best choice.

Well, the debt avalanche method gives order so that you can overcome your debts through a simple strategy to understand and put into practice.

In this method, the prioritized accounts should be those that incur the highest interest rate. We know that high-interest rates are the “growth factor” of debt.

Thus, by fighting them, it is possible to settle your debts by controlling them so that they grow as little as possible. However, like any method, this one also has advantages and disadvantages. Check it out below.


  • You avoid paying too much interest;
  • Control the growth of your debts by taking care of the accounts with the greatest potential for growth first;
  • You have a fixed, sequenced, strategic debt payment schedule: just stick to it;
  • In most cases, this can be the shortest route to debt relief.


  • The process can be slow;
  • When debts with the highest interest rates are high, you may not have the incentive to pay off a debt in full every month;
  • People more used to the incentive generated by the feeling of paying debts in the short term may become discouraged and even give up applying this method;
  • The results are only evident in the long term.

Is the debt avalanche method a good choice for paying off debt?

Young Brazilian man isolated on pink background having doubts
Find out if the debt avalanche method is good for paying off debt. Source: Adobe Stock

Many finance and debt settlement experts point to this method as a simple way to pay off debt. Anyone with any level of training can apply it. You won’t need to buy software, do the math, or study difficult concepts.

This is certainly a big advantage of this method. In addition, some trials claim that, in general, the avalanche brings better results than other famous methods, such as the “snowball”.

However, that doesn’t mean that the avalanche method will always be best for you.

Before choosing your strategy, comparing the methods and evaluating the most suitable for your profile is always important.

But, if you are in a hurry or don’t understand how to evaluate each strategy, choosing the debt avalanche method will never be a wrong decision.

How can you get started with the debt avalanche method?

In a simple step-by-step, find out how to apply the avalanche method and say goodbye to your debts!

List all your debts

Write down all your debts on a piece of paper or a spreadsheet. In columns, it informs the interest, the total amount of the debt, the minimum monthly payments, and the issuer of each.

To make sure you do not forget anything, check your credit history. Here is a short list of types of debt you should consider:

  • Student loans;
  • Credit cards;
  • Car loans;
  • Personal loans;
  • Utility and intercompany bills;
  • Medical debt.

Organize all your debts in a sequence

Now it’s time to organize all your debts, regardless of type, in terms of interest rate. Put the debt with the highest interest rate in 1st place, regardless of other criteria.

Then write down the debt with the second highest interest rate and repeat this process until you pay off all your debts.

In the end, all your accounts will be in descending order of interest rate.

envelope and dollar bills

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Less is more! Understand how it is possible to simplify your financial coming to have more quality of life and even profit more. Here are some useful tips for that!

Start paying your debts

Now it’s time to start executing the debt avalanche method itself. The idea here is to make the minimum payments on each debt.

After this process, the entire amount to settle excess debts must be invested to pay off the debt with the highest interest rate. Repeat this process until the 1st debt is fully paid.

Then do the same for the second debt, the third, the fourth, and so on. Just stop when all your debts are gone.

Alternatives to the debt avalanche method

Have the downsides of the debt avalanche method put you off using it? It’s okay. That’s not a problem.

In fact, you can still find other alternative methods to pay off your debts strategically. Next, learn about 4 other methods in addition to the formula presented.

Snowball method

Like the avalanche method, this tactic organizes your debts to be paid. However, the listing criteria used here are different.

In the snowball method, you should start by paying off the smallest bills first, ignoring interest rates.

The feeling of having less debt every month will keep you motivated enough to follow this method.

Debt consolidation

Happy and smiling hispanic businesswoman typing on laptop, office worker with curly hair and glasses happy with achievement results, at work inside office building
Alternatives to the debt avalanche method. Source: Adobe Stock

In practice, with this strategy, you will apply for a loan that covers the amount of all your debts.

Thus, instead of paying each bill individually, you will only pay the installments of your loan.

This method can be even more advantageous if you close a loan with a low-interest rate.

If this method interests you, we recommend checking with banks and credit unions to compare rates and terms.

If your credit score is not good or excellent, you may not be able to negotiate advantageous terms on a consolidation.

Debt management plan

In some cases, you may prefer to enlist the help of a debt settlement professional. He can evaluate and combine methods and find the best strategy for your situation.

In some cases, it is possible to find consultations with non-profit companies. These professionals can also negotiate better terms on debt consolidations or with the companies you have debts with.

Credit card with balance transfer

Several credit cards offer 0% APR periods (usually 12 to 21 months). In other cases, it is possible to find cards with low-interest rates. So you can transfer your debts and turn them into your credit card balance.

Indeed, the main advantage is being able to pay them in monthly installments without interest. Thus, this is one of the best ways to pay off debts.

However, only people with good or excellent credit scores can access cards with 0% APR periods.

We have already written an exclusive article about balance transfer on credit cards. To understand the advantages, disadvantages, and how this method works, access the post below and say goodbye to your debts!

Balance Transfer Credit Cards concept, finance words on white background

What are credit card balance transfers? Learn how to do it!

Understand how credit card balance transfer can help you pay the bills and achieve the long-awaited “financial health”.

About the author

José Gonçalo

I started reading about finance only to find better options than savings. Since then, I have never stopped studying finance, and I believe that writing about it is the best way to help individuals feel fulfilled and have a healthy financial life. Today, I balance finance and medical school studies.

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