Debt Payoff Calculator

How the Debt Payoff Calculator Works

This calculator uses monthly compound interest to project exactly when your debt will be gone. Every month, interest is charged on the remaining balance before your payment is applied. The portion of each payment that goes toward principal reduces the balance, which in turn reduces next month's interest charge.

The Formula

When your payment consistently exceeds the monthly interest, your balance shrinks every month. If your payment equals or falls below the interest, the balance never decreases — the calculator will tell you clearly if that's the case.

Example Calculation

Balance: $5,000 at 19.99% APR, paying $150/month.

Month 1 interest: $5,000 × (19.99 / 12 / 100) ≈ $83.29. Principal paid: $150 − $83.29 = $66.71. New balance: $4,933.29. Repeat monthly until the balance reaches zero.

How Extra Payments Help

Even a small extra payment accelerates payoff dramatically because it reduces the principal faster, which means less interest accrues in every subsequent month. The savings compound over time — on a high-rate balance, an extra $50/month can cut months off the schedule and save hundreds in interest.

What Is APR?

APR (Annual Percentage Rate) is the yearly cost of borrowing, expressed as a percentage. You'll find it on your credit card statement, loan paperwork, or lender portal. Most credit cards charge between 15% and 30% APR. The higher the APR, the more important it is to pay above the minimum.