How to Pay Off Online Loans Using the Avalanche Method

The debt avalanche method flips the snowball strategy, switching from balances to interest rates.

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You’ll focus on paying down the account with the highest interest rate or APR to control how much interest you accrue over time.

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Here’s how you can follow this method:

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List your unsecured debt, ordering accounts by biggest APR to smallest APR.

Ensure you can pay the monthly minimums on every account on your list. Refer to your budget to make sure you hit this target.

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Focus on the account with the biggest APR first. You’ll want to put any extra cash towards this account until you pay it off completely.

Moving onto the next highest APR, you’ll want to roll in what you were paying towards the first account (any extra cash and its monthly minimum) and put it towards the second account, plus its monthly minimum.

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Rinse and repeat until you move down your list until you move down your entire list.

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How to Pay Off Online Loans Using the Avalanche Method

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The debt avalanche method flips the snowball strategy, switching from balances to interest rates.

You’ll focus on paying down the account with the highest interest rate or APR to control how much interest you accrue over time.

Here’s how you can follow this method:

List your unsecured debt, ordering accounts by biggest APR to smallest APR.

Step One

Ensure you can pay the monthly minimums on every account on your list. Refer to your budget to make sure you hit this target.

Step Two

Focus on the account with the biggest APR first. You’ll want to put any extra cash towards this account until you pay it off completely.

Step Three

Moving onto the next highest APR, you’ll want to roll in what you were paying towards the first account (any extra cash and its monthly minimum) and put it towards the second account, plus its monthly minimum.

Step Four

Rinse and repeat until you move down your list until you move down your entire list.

Step Five

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