About This Tool
The debt payoff calculator shows you how long it will take to become debt-free and how much interest you'll pay along the way. You can input multiple debts—credit cards, student loans, car loans—and see the total picture. It also lets you experiment with extra payments to see how much faster you can eliminate debt and save on interest. This tool is motivating and helps you create a realistic payoff plan.
How It Works
The calculator uses an amortization approach for each debt, applying the minimum payment or a custom payment. It tracks the balance, interest accrual (based on APR divided by 12), and principal reduction each month. For extra payments, it applies them to the highest-interest debt first (avalanche method) or the smallest balance (snowball method), depending on your preference.
Examples
- A $5,000 credit card balance at 22% APR with a $150 monthly minimum payment takes about 47 months to pay off and costs $2,050 in interest.
- If you have three debts totaling $20,000 and add an extra $200 per month using the avalanche method, you could save $1,200 in interest and pay off 8 months earlier.
Pro Tips
- Use the avalanche method (highest interest first) to minimize total interest paid, or the snowball method (smallest balance first) for psychological wins.
- Make sure your extra payment is applied to the principal, not future payments—confirm with your lender.
- Avoid taking on new debt while paying off old debt; freeze your credit cards if needed.