Debt Payoff Calculator

How this calculator works

For each debt, the calculator charges interest on the outstanding balance each month, applies your payment, and repeats until the balance reaches zero. Adding up those months gives the payoff time, and adding up the interest gives the true cost of the debt.

If a monthly payment does not exceed the monthly interest, the balance grows rather than falls. The calculator flags this, because it is the single most important thing to know about a debt.

The formula

Each month: interest = balance × (annual rate ÷ 12 ÷ 100); new balance = balance + interest − payment. Repeat until the balance is cleared.

Worked example

A 45,000 balance at 19 percent with payments of 1,500 a month clears in roughly 41 months and costs about 16,300 in interest. Increasing the payment to 2,000 clears it in about 28 months for around 10,600 — a saving of nearly 5,700 for 500 more a month.

Why this calculation is useful

Debt is far easier to tackle once it has a finish date. Seeing the interest cost also makes the case for redirecting spare money at balances rather than leaving it in a low-interest account.

Common mistakes to avoid

• Paying only the minimum, which on revolving credit can extend repayment for many years.
• Adding new debt while repaying existing balances.
• Consolidating without closing or stopping use of the cleared accounts.
• Clearing debt with no emergency buffer, so the next surprise goes back onto credit.
• Ignoring the rate and paying off whichever balance feels most urgent.