Debt Payoff Calculator

Each month, interest is worked out on what you still owe. In the example, the first month’s interest is $50, so of your first $150 payment only $100 goes to the debt itself. As the balance falls, the interest falls with it, and more of each payment goes to the debt.

Over the whole plan, about $1,112 of the $6,112 you pay is interest: about $18 of every $100. On a credit card at 22%, with the same $5,000 and $150 a month, it is about $2,798 of $7,798: about $36 of every $100.

Under your answer, the “things worth knowing about getting debt-free” button opens an expanded answer that shows this split for your own debts.

With several debts, people usually choose between two orders for any money above the required payments. Paying the highest-rate debt first (often called the debt avalanche) saves the most interest. Paying the smallest debt first (the debt snowball) clears one debt sooner, a quick win that some people find keeps them going. The Consumer Financial Protection Bureau describes both.

In this calculator, each debt is paid with its own payment, and any extra goes to the highest-rate debt first. It does not compare the two orders for the plan itself. With more than one debt, the expanded answer compares the two orders for one thing only: what happens if a finished debt’s payment moves on to the next one.

An example with three debts: a card of $4,000 at 24% ($120 a month), a second card of $2,500 at 19% ($75) and a car loan of $9,000 at 7% ($260). Paying each on its own, the last one is gone in 4 years and 8 months, with about $4,822 in interest. Moving each finished debt’s payment to the next one, highest rate first: 3 years and 9 months, and about $226 less interest. Smallest debt first: also 3 years and 9 months, and about $218 less. Here the order changes the cost by about $8; in this example, moving the payment on is what brings the date closer. Your own numbers may show a bigger gap.

In this example, both orders pay off all three debts. Which order suits you is your choice.

A card’s minimum payment is often a small share of what you owe plus that month’s interest. The calculator uses a common card rule: 1% of the balance plus the month’s interest, at least $25. Your card’s own rule may differ.

Because the minimum shrinks as the balance shrinks, it takes a long time. On the example ($5,000 at 12%), paying only the minimum takes 17 years and 4 months and costs about $4,242 in interest. On a card at 22%, it takes 19 years and 2 months and costs about $8,100. In “When will I be debt-free?”, the line above the button under your answer shows this comparison for your own debts.

In the US, your card statement shows how long the minimum alone would take, and how much a month would pay the balance off in 3 years. The Consumer Financial Protection Bureau explains that box: its amounts count only your current balance, not new purchases.

In the UK, if over 18 months you pay more in interest, fees and charges than you pay off what you borrowed (the rules call this persistent debt), your card provider must contact you; after 36 months it must offer you a way to pay it off faster (Financial Conduct Authority).

The calculator keeps your rate the same the whole time. Real rates can change. In the US, a card’s rate can go up when a temporary rate ends (such as a low rate on a balance transfer), when a variable rate follows its index up, or when your minimum payment has not been received within 60 days after its due date. For other increases the card company must give you 45 days’ notice, and the new rate generally applies to new purchases (Consumer Financial Protection Bureau).

If your rate changes, enter the new one and see the new date. In the example, 18% instead of 12% makes it 3 years and 11 months instead of 3 years and 5 months, and about $1,984 in interest instead of $1,112. The expanded answer also shows where your date would move if every rate rose by 5 percentage points.

These are two common ways people try to lower the rate. A balance transfer moves card debt to another card with a low or 0% rate for a limited time, usually for a fee: a share of the amount you move or a fixed amount, whichever is more. A consolidation loan is one new loan that pays off several debts, so you have one payment.

The Consumer Financial Protection Bureau points out what to check: low rates that last only for a time, the fees, and a lower monthly payment spread over longer, which can cost more overall. It also notes that taking on new debt rarely works unless spending goes down. The Federal Trade Commission adds that a loan against your home puts the home at risk if you can’t make the payments.

To compare, run the calculator twice: once with your debts as they are, and once with the new rate and monthly payment, adding any fee to “Amount you owe”. We don’t recommend either one, or any lender.

An emergency halfway, such as a car repair or a lost month of pay, can push your date back or end up on a card. Some people keep a small cushion while they pay down debt. Others put every spare dollar on the debt first, especially when its rate is high. Both are common; it depends on your situation.

The Consumer Financial Protection Bureau’s guide to emergency savings suggests starting from the unexpected costs you have had before. The Savings Goal Calculator shows how long a cushion of your size would take.

In the US, credit counseling organizations are usually nonprofit. They advise on money and debts and can set up a debt management plan: one monthly payment to the organization, which pays your lenders (Consumer Financial Protection Bureau). The Federal Trade Commission warns that a nonprofit label does not guarantee the service is free, affordable or legitimate, so ask about fees before you sign up. It also warns that debt settlement (getting a lender to accept less than you owe, often through a company) can be risky, and that a settlement company can’t charge you before it settles a debt.

In the UK, MoneyHelper lists free, confidential debt advice.

This is information, not a recommendation of any organization.

Try both questions on your own debts. In “When will I be debt-free?”, add $25 or $50 under “Extra you can add each month” and see how much sooner it comes. In the other question, try different time periods under “Debt-free in”: for the example debt, 2 years needs $236 a month, 3 years needs $167, and at 4 years what you pay now is already enough.

Have more than one debt? Add each one, so you get one date for all of them. Not sure of a rate? Your statement may call it APR.

Once you are debt-free, the money you paid each month is yours again. The Compound Interest Calculator shows what $150 a month could grow into. All our calculators are on the financial calculators page.

It assumes you pay the same amount at the end of every month, with no month missed, that your rates stay the same, and that nothing new goes on these debts. The monthly rate is the yearly rate divided by 12, charged on what you still owe. It does not include fees, such as annual fees, late fees or a balance transfer fee, unless you add them to what you owe.

It doesn’t know your budget, so it can’t say whether a monthly amount is affordable. It doesn’t know your lender’s own rules, your credit score, or what happens with options such as debt settlement, bankruptcy, or student loan forgiveness and income-based plans.

It shows what your numbers say. The decision stays with you.