Debt Avalanche Calculator: The Fastest Way to Be Debt-Free
Two Methods, One Goal: Zero Debt
When you have multiple debts (credit cards, personal loans, car loans), should you pay off the highest-interest debt first or the smallest balance first? The answer depends on whether you optimise for math or psychology.
Avalanche vs Snowball
| Debt Avalanche | Debt Snowball | |
|---|---|---|
| Strategy | Pay highest interest rate first | Pay smallest balance first |
| Saves more money? | Yes — always | No |
| Faster payoff? | Usually yes | Sometimes no |
| Psychological wins? | Slower initial progress | Quick wins — motivating |
| Best for | Disciplined, number-focused people | People who need motivation |
Worked Example
| Debt | Balance | Interest Rate | Min Payment |
|---|---|---|---|
| Credit Card A | ₹50,000 | 36% | ₹2,500 |
| Personal Loan | ₹2,00,000 | 14% | ₹5,000 |
| Car Loan | ₹3,50,000 | 9% | ₹7,000 |
Avalanche order: Credit Card (36%) → Personal Loan (14%) → Car Loan (9%). Any extra money beyond minimums goes to the highest-rate debt. This saves ₹35,000–50,000 in total interest vs snowball.
Use the debt avalanche calculator to model both strategies with your actual debts and find the optimal payoff date.