Debt Avalanche Priority Order
Use SORT to rank your debts by interest rate from highest to lowest - the mathematically optimal payoff order.
=SORT(debt_range, rate_column, FALSE) How It Works
The debt avalanche method pays off debts in order of interest rate, highest first. This minimizes total interest paid over time. The SORT function automates the ranking so the priority list updates as debts change.
Syntax
=SORT(data_range, sort_column, is_ascending)- data_range - all your debt data (name, balance, rate, minimum)
- sort_column - which column to sort by (interest rate column number)
- is_ascending - FALSE for highest first (avalanche order)
Example
Unsorted Debts:
| Debt | Balance | Rate | Minimum |
|---|---|---|---|
| Car Loan | $12,000 | 6.5% | $280 |
| Credit Card | $4,200 | 22.9% | $105 |
| Student Loan | $18,500 | 5.0% | $195 |
| Personal Loan | $3,000 | 11.0% | $90 |
Formula: =SORT(A2:D5, 3, FALSE)
Avalanche Order Result:
| Priority | Debt | Balance | Rate | Minimum |
|---|---|---|---|---|
| 1 | Credit Card | $4,200 | 22.9% | $105 |
| 2 | Personal Loan | $3,000 | 11.0% | $90 |
| 3 | Car Loan | $12,000 | 6.5% | $280 |
| 4 | Student Loan | $18,500 | 5.0% | $195 |
Pay minimums on everything, then put all extra money toward the credit card first.
Setting Up an Avalanche Tracker
| A | B | C | D | E |
|---|---|---|---|---|
| Debt Name | Balance | APR | Minimum | Monthly Interest |
| Credit Card | 4200 | 22.9% | 105 | =B2*C2/12 |
| Personal Loan | 3000 | 11.0% | 90 | =B3*C3/12 |
| Car Loan | 12000 | 6.5% | 280 | =B4*C4/12 |
| Student Loan | 18500 | 5.0% | 195 | =B5*C5/12 |
| Totals | =SUM(B2:B5) | =SUM(D2:D5) | =SUM(E2:E5) |
Monthly Interest column shows exactly how much each debt costs per month - a useful motivator.
Variations
Avalanche vs Snowball Comparison
Snowball sorts by balance (lowest first) instead:
=SORT(A2:D5, 2, TRUE)The snowball method provides quicker wins but typically costs more in total interest.
Adding a Priority Number
Use RANK to add an explicit priority column:
=RANK(C2, $C$2:$C$5, 0)This returns 1 for the highest rate, 2 for second highest, and so on.
Highlighting the Top Priority
Use conditional formatting or a formula to flag the current focus:
=IF(C2=MAX($C$2:$C$5), "PAY THIS FIRST", "Minimum only")Interest Cost Comparison
Calculate how much interest each debt costs per year:
=B2 * C2This makes the case for avalanche order even clearer - high-rate debt costs the most regardless of balance.
Pro Tips
-
Avalanche saves the most money - mathematically, paying the highest rate first always minimizes total interest
-
Recalculate monthly - as balances drop, the interest column updates to show your progress
-
Same rate? - if two debts have the same rate, pay the smaller balance first for a quicker win
-
Extra payments matter most early - the first debt you eliminate frees up its minimum payment for the next one
-
Use FILTER to hide paid debts -
=FILTER(A2:D5, B2:B5>0)removes zero-balance rows
Common Errors
- Confusing APR with monthly rate: SORT by APR is correct for ordering - just divide by 12 when calculating monthly interest
- Forgetting minimum payments: The avalanche method still requires paying minimums on all debts - only extra money targets the top priority
- Wrong sort direction: FALSE = descending (highest first) for avalanche, TRUE = ascending (lowest first) for snowball