Loans & Debt · Glossary
Debt avalanche
A debt payoff method that sends every extra dollar to the debt with the highest interest rate first, which minimizes total interest paid.
You make the minimum payment on every debt, then put any extra money toward the highest-rate balance. When it's paid off, its payment rolls into the next-highest rate. Mathematically, the avalanche always pays the least interest.
The trade-off is motivation. If your highest-rate debt also has a large balance, it can be months before you close your first account. Many people find the debt snowball easier to stick with.
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Disclaimer: Definitions are general education, not financial, tax, or legal advice. Figures are for the 2026 tax year unless noted.