The Avalanche Method to Pay Down Debt FAST!

pay off debt!

In the movies, an avalanche is typically depicted as ginormous layers of snow and ice which break loose and come screaming down the side of a mountain, knocking over trees, the hero trying desperately to outrun it and, ultimately, crushing everything at the base of the mountain.

And THAT is what the Avalanche Method of paying off debt is all about:  crushing the debt in an avalanche of money!

The Avalanche Method of paying off debt optimizes for paying as little interest as possible over the long run of paying back your debt.


Would you rather watch than read?  Here's the youtube video I did on The Avalanche Method - Enjoy! 


The Avalanche Method

It’s not going to come as a shock to anyone that credit card debt is one of the leading types of debt for the average consumer.  Right after mortgages and car loans.   It’s also the biggest impediment to saving.  Think of all the money you’re paying to your credit card.  Now, think if all of that money was going into your savings account! 


The Avalanche Method focuses on paying off debts with the highest interest rate.  


Here’s what the Avalanche Method of debt repayment looks like:

  • Identify your debts that have the highest interest rate
  • Determine how much you can pay towards that debt
  • For any other debts you have, only pay the minimum on those
  • Throw as much money as possible towards the debt with the highest interest rate


How Does the Debt Avalanche Work?

The Debt Avalanche method pays down debt fast because of two things.

One, it focuses on the debt with the highest interest rate.  The higher the interest rate, the more interest you're going to pay in the long run.  


For example, let’s say you have $1000 in credit card debt on a card with an interest rate of 9.99%.  If you only pay $50 per month on that card, it will take you 22 months and you’ll pay approximately $98 in interest.

 Now, let’s say that card has an interest rate of 24%.  If you only pay $50 per month on that card, it will take you 27 months and you’ll pay approximately $307 in interest!




Once you figure out which card or loan has the highest interest rate, the second way the Avalanche Works is by focusing as much of your cash as possible on that debt.  This means that you’re going to pay as much as possible OVER THE MINIMUM amount.  


In bank-speak, this is called paying the principal.  The principal is the amount you originally got as a loan, or the amount of the original purchase, if it’s a credit card charge.  Paying more than the minimum reduces the principal.  Interest is calculated on the principal, or original amount you borrowed/used the card to buy.  


The more you pay towards that original amount, the less interest the bank can charge you!**


Here’s a link to a debt payment calculator if you want to see how much you’ll pay - or not pay! - on your credit card debt!  CLICK HERE


That’s why the Debt Avalanche is so powerful and PAYS OFF DEBT FAST!  

By focusing all of your available cash on the card with the highest interest rate, and paying the minimum on all other cards/debts, you’ll save yourself hundreds, if not thousands of dollars in the long run because you’re paying down that principal with each payment.  The minimum payment mostly only pays the INTEREST you owe.  Very little (if any, in some cases) goes towards paying the PRINCIPAL (amount you originally borrowed, or the amount of the original credit card purchase).  


Should You Use the Avalanche Method to Payoff Debt?

As with any method to pay off debt fast, there are Pros and Cons to the Debt Avalanche Method.  Knowing the Pros and Cons will help you make the best decision for YOU.  

The Pros and Cons to pay off debt fast with the Avalanche Method are listed below, but remember: the BEST strategy is the one you STICK WITH!  So, if you’re worried this might not work for you, my best advice is to give it a try for a couple of months and see how it feels to you.  You can always switch to the Snowball Method.  Click HERE to read more


The Pros and Cons of the Debt Avalanche Strategy

  • Pro of the Debt Avalanche is that because the debts with the highest interest rates are paid off first, you’re going to pay less interest in the long run.  Which is great!


  • Con of the Debt Avalanche  is that if the debt with the highest interest rate is a large debt, then it might take some time to pay that debt off and it can feel like you're not making much progress.  


That can be demoralizing and demotivating and, frankly, FRUSTRATING, which can cause some people to give up on paying off their debt.  


When that happens, it’s just a shame because paying off debt is the first step to true financial freedom!   


Still Not Sure if the Debt Avalanche is Right for You?

But what about the Snowball method to pay off debt?  Or the Tornado Method to pay off debt?  If you’re wondering which method might be right for you, I wrote a blog that compares the Avalanche method vs the Snowball method vs the Tornado methodJust CLICK HERE


Here are some other blogs that you might also be interested in!


The Snowball vs the Avalanche vs the Tornado Methods

The Snowball Method to pay off debt FAST!

**This is also where banks can scam you.  Make sure they aren’t charging you interest on the interest they already charged you!




***I am not a licensed financial advisor.  I am a money expert and I offer education, tips, tricks and my opinions around money.  You should consult a professional who understands your needs in order to make the best decisions for you!  Additionally, some links in this blog may be affiliate links, which means if you click the link and buy the product I may earn a small commission - at NO COST to You! It’s one of the ways I keep the lights on around here so TYIA! 😉

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