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.

Credit Card Minimum Payments

A card minimum isn't a fixed amount. It is usually recalculated each month from the balance, so it shrinks as you pay. That feels easier every month, but it means more of each payment goes to interest and the payoff stretches out for years. Switch the calculator to Card minimum only to model it.

Example (made-up numbers): a $3,000 balance at 22% APR, where the minimum is 1% of the balance plus interest with a $25 floor. The first minimum is $85. Paying only the minimum takes 180 months (15 years) and about $4,433 in interest. Paying a steady $85 every month instead clears it in 58 months with about $1,873 in interest.

In the US, your monthly statement has to show a minimum payment warning: roughly how long paying only the minimum would take and what it would cost in total, under Regulation Z § 1026.7. If the calculator's number differs, trust your statement — issuers use their own exact formula. New to the terms? See statement balance, grace period and credit utilization.

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.