An avalanche is a mass of snow, ice, and rocks falling rapidly down a mountainside. A “debt” avalanche is a method used to minimize your overall interest payments. When using this method, you can pay each of your debt’s minimum monthly payments and devote the rest of your re-payment budget to your highest interest loan.
Do you expect to be paying off debt in your retirement? If so, this method may be right for your personal financial situation. When consistently followed, the “debt” avalanche method indisputably minimizes your overall interest payments as it slows down the interest accumulation rate and increases the speed at which your debt is paid off.