Interest is what makes debt expensive. The avalanche attacks it directly.
Direct answer
With the debt avalanche, you pay the minimum on every debt and put all extra money toward the one with the highest interest rate. When it is paid, you move on to the next highest rate. This typically minimises the total interest you pay.
Steps
- List each debt with balance, interest rate and minimum payment.
- Order by interest rate, highest to lowest.
- Pay minimums on all of them.
- Send every extra amount to the top-rate debt.
- When it is cleared, roll its payment to the next one.
Avalanche vs snowball
| Avalanche | Snowball | |
|---|---|---|
| Order | Highest rate first | Smallest balance first |
| Interest cost | Usually lower | Usually higher |
| Motivation | Slower wins | Faster wins |
See the snowball method for the other approach.
Tips
- Never miss minimum payments, which can bring fees.
- Stop adding new debt while you repay.
- Keep a small starter emergency fund so a surprise does not push you back to borrowing.
Where Teyro fits
Teyro's Budgeting for Beginners course turns this into short lessons you can play in a few minutes a day. It has 50 lessons, and you can start free.
The bottom line
If you can stay motivated, the avalanche saves the most money. If not, choose the snowball.
This is general education, not personal financial advice.
