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To help support our reporting work, and to continue our ability to provide this content for free to our readers, we receive compensation from the companies that advertise on the Forbes Advisor site. The Forbes Advisor editorial team is independent and objective. You’ll get a quick summary at the top of the calculator showing how much this plan could save you in interest charges, and you can click the “View Report” button for a detailed look at the results. This continues until you have “rolled through” all of your credit cards and your debt is paid in full. When that credit card is paid in full, the card with the next highest rate will be paid down. The calculator will apply your additional monthly payment first to the credit card with the highest rate. Then, in the box above, enter any additional amount that you can pay toward your debt in the “Roll-down amount” field. To calculate various repayment scenarios using the debt avalanche calculator, click the drop-down box that says “Credit card debt” and enter your credit card balances and interest rates. The debt snowball, in contrast, has you focusing on the smallest debts first so that you get a psychological boost from eliminating some of your debt sooner. Once the credit card debt with the 17.99% APR is paid off, you move on to the debt with the next highest interest rate. Any extra money you have in your budget goes toward your highest-interest debt-in this case, the credit card with an APR of 17.99%. So, if your highest-interest debt is a credit card balance with an annual percentage rate (APR) of 17.99%, you make paying off that debt your primary goal, while still making at least the minimum monthly payments on your other debts. To use the debt avalanche method of paying down debt, you focus on the debt with the highest interest rate first. The debt avalanche strategy, sometimes referred to as the “roll-down” method, focuses on eliminating your highest-interest debt before any other debt. The debt avalanche method is a strategy for paying down debt that is often compared to the debt snowball method. Then, plug them into our calculator and you can see estimates for how much you’ll need to pay on each card per month, how long it will take to pay off each card and the amount of interest you could save by using the debt avalanche to get out of debt. This method of attacking the balance with the highest interest is called rolling down your debt or the debt avalanche method and can be an effective strategy to keep you on track to pay down your balances.įorbes Advisor has created this calculator to help you simulate various pay-off scenarios based on your budget, current balances and interest rates on those balances.įirst, examine your monthly credit card statements so you can list out the accounts in order of highest to lowest interest rates. You’re ready to tackle your debt and you have a plan: Pay down the balance with the highest interest rate first and when you’ve knocked out that balance, move on to the card with the next highest interest rate and do the same.
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