Debt Payoff Calculator
This calculator helps you determine how long it will take to pay off your debt and how much interest you'll pay based on your current payments or a payment amount you specify.
| Name | Balance | Interest | Payment |
|---|---|---|---|
| % | |||
| % | |||
| % |
Payoff Summary
| Total Debt | $18,000.00 |
|---|---|
| Total Interest | $2,345.67 |
| Payoff Time | 3 years 4 months |
| Payoff Date | June 2026 |
Payment Schedule
| Month | Payment | Principal | Interest | Remaining |
|---|
About the Debt Payoff Calculator
This debt payoff calculator helps you create a strategic plan to eliminate your debts efficiently. Whether you're dealing with credit cards, personal loans, or other types of debt, this tool provides a clear roadmap to becoming debt-free.
How Debt Payoff Works
Debt payoff involves making regular payments to reduce your outstanding balances. The two most common strategies are:
1. Debt Snowball Method
This approach focuses on paying off your smallest debts first while making minimum payments on larger debts. As each small debt is paid off, you roll that payment amount into the next smallest debt. This method provides psychological motivation as you see debts being eliminated quickly.
2. Debt Avalanche Method
This method prioritizes paying off debts with the highest interest rates first while making minimum payments on others. Mathematically, this approach saves you the most money in interest payments over time, though it may take longer to see individual debts fully paid off.
Key Terms Explained
Principal: The original amount of money borrowed or still owed on a loan, excluding interest.
Interest: The cost of borrowing money, expressed as a percentage of the principal.
Minimum Payment: The smallest amount you're required to pay each month to keep your account in good standing.
Extra Payment: Any amount paid above the minimum payment, which goes directly toward reducing your principal balance.
Benefits of Using This Calculator
Visualize Your Progress: See exactly when each debt will be paid off and how much interest you'll save.
Compare Strategies: Evaluate both the snowball and avalanche methods to see which works best for your situation.
Motivation: Having a clear payoff plan can help you stay committed to your debt-free journey.
Financial Planning: Understand how extra payments can significantly reduce your payoff time and interest costs.
Tips for Faster Debt Payoff
Increase Payments: Even small additional payments can make a big difference over time.
Reduce Expenses: Temporarily cutting discretionary spending can free up more money for debt payments.
Consider Balance Transfers: Moving high-interest debt to a lower-interest card can save money (but watch for transfer fees).
Stay Consistent: Stick to your plan even when it feels challenging - the results will come.