Debt Payoff Calculator
Months to pay off a debt = -log(1 - r × B ÷ P) ÷ log(1 + r), where B is the balance, r the monthly rate and P the payment. A $7,800 card balance at 22.9% APR, paid at $350 a month, takes 30 months and about $2,455 in interest. Paying $450 cuts it to 22 months.
How to use the Debt Payoff Calculator
- Enter your current balance.
- Enter the APR on the debt.
- Enter the amount you will pay each month.
- Read your debt-free date and total interest; try a higher payment to see how much time and interest it saves.
Formula
n = -log(1 - r × B ÷ P) ÷ log(1 + r) · interest = P × n - BB is the balance, P the fixed monthly payment and r = APR ÷ 12. If the payment does not cover the first month's interest (B × r), the balance never falls and the calculator tells you the minimum needed.
Snowball versus avalanche
- Avalanche: pay minimums on everything, then put every extra dollar toward the highest-rate debt. This saves the most interest.
- Snowball: pay minimums on everything, then attack the smallest balance first. Quick wins help many people stay motivated.
- With either method, when one debt is gone, roll its payment into the next one.
Typical order by interest rate
- Payday and title loans (often 300% APR or more)
- Credit cards (about 18% to 30%)
- Personal loans
- Auto loans
- Student loans and mortgages
Debt Payoff Calculator questions
How long will it take to pay off my debt?
It depends on the balance, the APR and your monthly payment. Enter all three and the calculator shows your debt-free date. For example, $7,800 at 22.9% APR paid at $350 a month takes 30 months, with about $2,455 in interest.
How much does paying extra each month save?
Often a lot, because extra money goes straight to principal. On a $7,800 balance at 22.9%, raising the payment from $350 to $450 a month cuts payoff from 30 to 22 months and saves about $694 in interest. Even $25 to $50 extra makes a visible difference.
What is the debt snowball method?
The snowball method pays minimums on every debt and puts all extra money toward the smallest balance first. When it is paid off, its payment rolls into the next smallest. The quick wins keep many people motivated, though it can cost more interest than the avalanche method.
What is the debt avalanche method?
The avalanche method pays minimums on every debt and puts all extra money toward the highest interest rate first. It is mathematically optimal, saving the most interest and usually finishing sooner, but the first payoff may take longer to arrive.
Should I pay off debt or invest?
Pay off high-interest debt, roughly anything above 7% to 8%, before investing beyond an employer retirement match. Paying a 22% credit card is a guaranteed 22% return. For low-rate debt under about 4% to 5%, investing extra money often comes out ahead over the long run.
Is debt consolidation a good idea?
Consolidation helps if it lowers your interest rate and you stop adding new debt. A personal loan or a 0% balance transfer can beat credit card rates, but watch transfer fees, the promotional end date and the temptation to run the cards back up.
Why does my payment not reduce the balance?
If your payment is less than the monthly interest, the balance cannot fall. Monthly interest is roughly balance × APR ÷ 12; on $7,800 at 22.9% that is about $149. Pay more than that, or ask the lender about a hardship or lower-rate plan.
What happens to my credit score as I pay off debt?
It usually improves, mainly because your credit utilization (balances divided by limits) falls. Keep paid-off cards open if they have no annual fee, since older accounts and higher available credit help your score. Always make at least the minimum payment on time.