The Debt Avalanche method orders debt repayments by paying at least the required amount on every account, then applying available extra money to the debt with the highest interest rate. After that balance is cleared, move the extra payment to the next highest-rate debt. Under the right conditions—on-time payments, complete interest and fee calculations, and no contract terms that change the outcome—this may reduce interest costs compared with paying other debts first.
The associated video discusses managing money and clearing debt while preparing a family, but it does not teach the Debt Avalanche method or provide a formula for ordering accounts. This article uses the video only as context and explains the method separately.
How to Order Payments with the Avalanche Method
- List every debt, including its balance, interest rate, payment, due date, fees, and any early-payment terms.
- Pay the amount due on every account under its contract.
- Set an extra payment amount that will not interfere with essential expenses.
- Apply the extra amount to the highest-cost debt first, then update the order if balances or terms change.
Illustrative example: If one debt has a higher interest rate than another, the Avalanche method directs extra money to the higher-rate balance while keeping payments current on all debts. This example does not replace calculations using the actual contracts.
Check Contract Terms Before Making Extra Payments
Ask each creditor how interest is calculated, what amount is required to close the account, whether fees apply, and how payments above the minimum are allocated. If you may not be able to keep up, the Bank of Thailand recommends contacting the creditor early to discuss restructuring in line with your ability to pay. Review the total amount due and any new deadlines before accepting new terms.
Compare this approach with Debt Snowball, read Debt Snowball vs. Debt Avalanche, or enter your balances in the debt payoff planner.
Sources and Limitations
Updated 16 October 2026. This is general information, not individualized credit advice. The associated video discusses debt management generally; it does not explain the Debt Avalanche method.