How it works
The avalanche method is a multi-debt payoff strategy that directs every spare dollar at the debt with the highest interest rate while paying minimums everywhere else — the ordering that minimizes total interest mathematically, because a dollar killing 6.8% accrual saves nearly twice what a dollar killing 2.75% does. Student loans suit the method unusually well: borrowers typically hold several discrete loans at visibly different rates from different disbursement years, and servicers apply payments across all of them unless directed otherwise. This planner parses your loan list, estimates sensible minimums (interest plus $25, floored at your servicer's floor), and simulates the avalanche month by month with your extra payment riding on top. The output is the operational detail generic calculators skip: a ranked attack table showing which loan dies in which month, the debt-free date for the whole portfolio, and the interest saved versus drifting on minimums alone. On the defaults — $30,500 across three loans at 6.8%, 4.5% and 2.75% with $180 extra — every spare dollar rides the 6.8% loan while the smaller ones retire on schedule, and the table shows each dying off month by month until the portfolio is gone in eight years. The behavioral caveat deserves saying plainly: snowball orders (smallest balance first) cost slightly more but produce faster victories; the best method is the one you will actually finish.
Formula
Order loans by rate, descending; pool = Σ minimums + extra; each month pay minimums, aim the surplus at the highest-rate survivor
Tips
- Tell the servicer the extra targets one specific loan — undirected payments spread thinly.
- Re-run the plan after each consolidation, rate change, or new disbursement.
- Highest rate first saves the most; smallest balance first motivates hardest — choose deliberately.
- Autopay minimums everywhere to protect credit while the avalanche runs.
- Roll each freed-up minimum into the next target immediately — the snowball step that makes it avalanche.
Frequently asked questions
- What order should I pay off student loans?
- Avalanche logic says highest interest rate first: on the default 6.8%/4.5%/2.75% portfolio, the 6.8% loan absorbs every spare dollar while the others ride minimums. The ranked table above converts that principle into exact per-loan payoff months for your actual balances and extra payment.
- How much does the avalanche method actually save?
- It depends on rate spreads and extra size. Here, $180 extra on $30,500 saves nearly $20,000 versus minimums alone — and choosing avalanche over a reverse ordering preserves most of that. Wide rate spreads amplify the advantage of correct ordering considerably.
- Is avalanche or snowball better for student loans?
- Mathematically avalanche; behaviorally snowball. Student loans carry long horizons that blunt snowball's quick-win advantage somewhat, but a method abandoned saves nothing at all. If knocking out small balances keeps you engaged for years, the few hundred dollars of difference is a fair price for actually finishing.
- Should I pay off subsidized or unsubsidized loans first?
- Rank by interest rate, not subsidy status — the subsidy already did its work on past accrual. Today's rate determines tomorrow's damage, which is why this planner ignores loan type entirely and sorts purely on APR. A 6.8% subsidized loan dies before a 4.5% unsubsidized one, every time.
- How do extra payments get applied across multiple loans?
- However you instruct the servicer — which is the whole game. Undirected extras scatter across all loans proportionally; naming one target loan concentrates the firepower. Update the instruction each time a loan dies so the avalanche keeps rolling without manual thought.