The Debt Avalanche Method, Best Way To Get Out Of Debt 


We all feel overwhelmed as soon as we hear the word debt. And debt repayment is different for everyone. Still, many different approaches work for different people. And one of them is the debt avalanche method which we’ll discuss today.

For several reasons, what works well for others might not be your best approach. If you struggle to pay off debt, you may consider using the debt avalanche method. This method helps you manage what is owed to creditors more effectively.

In this article, we will help you understand how this method works and how you can implement it to save yourself from the misery of crippling debt later in life.

So will this be the best method to pay off your debt?

Let’s find out!

What is the debt avalanche method? 

The debt avalanche method is a strategy for first paying off debts with the highest interest rates. By making minimum payments on all debts and using any extra money to pay off debts with higher interest rates, you will be able to save more in the long run. 

If you can reduce your interest payments, you can put more money toward repaying your principal. You want to continue making the minimum payments on your other debts, which will eventually allow you to have less debt overall.

How to implement the debt avalanche? 

Already interested in how the method works? Great. But don’t jump in headfirst into unfamiliar territory.

Use these steps to determine how well your situation fits into this strategy, and plan everything before you start implementing it!

1. Make a list of your debt. 

You may have various types of debt, such as credit cards, student loans, and mortgages. 

Each type of debt can have different consequences, depending on the terms of the loan and how you’re paying it off. It’s important to be aware of your options and to take the time to understand the different terms and consequences of each type of debt. List each debt by the following categories:

  • Credit Cards
  • Student Loans
  • Auto Loans
  • Personal Loans
  • Bills Outstanding
  • Medical Debts

For each debt, list what you owe, the minimum monthly payment, interest rate and issuer. Having a payment schedule when beginning a debt repayment plan is helpful. 

This can help you stay on track and avoid unexpected bills. The payment schedule can be based on a certain date, such as when the debt is due, or a certain amount, such as a percentage of the original debt.

2. Organize the list from highest to lowest interest 

Start by sorting the list from the highest interest debt to the lowest interest debt. To pay off your debt the fastest, you should first focus on paying the debt with the highest interest. 

Before anything else, make sure to pay your debts on time so that your credit score remains in good shape and you don’t get behind on payments. If you can, use your extra money to pay off your highest-interest debt first. 

If you get a raise or bonus at work, consider starting a side hustle or switching to bringing your lunch to work instead of buying it. You can use that money to pay off your high-interest debt. You’ll work until the debt with the highest interest is paid in full.

3. Determine the flow of payments  

Remember to put a small amount into other debt repayments as well. This is better done by determining a fixed budget for each payment and following it until the highest one is paid off. Sticking to a single plan will also help you keep your expenditures in check and prepare for the next payment. 

Following a similar flow of payment on each round will also help you get accustomed to organizing your debts while feeling less overwhelmed from time to time.

4. Repeat the cycle 

Continue to get rid of debts and roll their minimum down to the additional debt repayment amount until all debts are paid off. If a promotional interest rate runs out, you may need to reorder your debts to focus on another one with the highest rate. 

To pay off your high-interest debt faster, you should layer the amount you were originally marking for that debt on top of the regular monthly payment for the debt with the next highest interest rate. Continue using this cycle until all your debts are paid.

Pros and cons of using the debt avalanche method 

Although the avalanche method could also be your least expensive and most sensible route to going debt-free, there are still some pros and cons you’ll face for using this method and making your plan around them to minimize problems.

Now that you know how the method works consider both ends of the bargain before making your decision. 

Advantages of the debt avalanche strategy  

By paying off your debts one by one, the amount of interest paid can be reduced, thus saving you more money. In addition, if you apply payments to the high-interest loan first, the interest you pay on each loan will decline. It could take longer to repay those loans, but you’ll save money.

The debt avalanche strategy works best for those with substantial credit card debt. Interest rates on credit cards are often in double digits, meaning they can quickly add up to a lot of money.

Disadvantages of the debt avalanche method

Taking action can make it easier to pay off your debt if it’s both your largest and highest priority debt. However, prioritizing paying off your high-interest debt first may result in a longer repayment period for your debt and make it difficult for you to stick to the plan till the end.

Many individuals favour having more limited-term objectives to pursue so they can feel happy with each success; it can discourage such people from following this strategy while seeing slow progress.


Programs for paying off debt, such as the debt avalanche approaches, are not inherently superior to other options. You might discover that a different approach, such as a balance transfer credit card, debt consolidation loan, or debt management program, is more appropriate. 

However, If the strategy sounds plausible or you feel it fits your circumstances perfectly, don’t hesitate to try it out, follow these steps, and successfully pay off your debt!

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