Debt Payoff Calculator
- Updated
- Formula shown
- Free, no sign-up
Results
Debt-free in 29 months with $2,010 of interest, saving $1,234
- Current payment ($250.00)
- $3,245
- With the extra ($350.00)
- $2,010
| Year | Current payment | With the extra |
|---|---|---|
| 1 | $6,384.07 | $5,073.85 |
| 2 | $4,432.90 | $1,540.67 |
| 3 | $2,076.97 | $0.00 |
| 4 | $0.00 | $0.00 |
How to use the debt payoff calculator
- Enter the balance you owe and the interest rate (APR).
- Enter the payment you make now each month.
- Enter an extra amount you could add each month. The results compare both plans side by side.
Have several debts? List them in the credit cards payoff calculator, which decides which one to pay first, or see whether one loan would be cheaper with the debt consolidation calculator.
Debt payoff formula
Interest saved = interest at P − interest at P + X
B is the balance, r the monthly rate (APR ÷ 12), P your current payment and X the extra payment. The formula gives the number of months, n, to clear the balance; the calculator rounds up and runs the full month-by-month schedule to total the interest. Every extra dollar goes straight to principal, so each later month is charged interest on a smaller balance. That is why the savings grow faster than the extra payment itself.
Worked example: $8,000 at 19%
The first month's interest is 8,000 × 0.19 ÷ 12 = $126.67. At $250 a month, the debt takes 45 months (3 years 9 months) to clear and costs $3,245 in interest. Adding $100 a month clears it in 29 months and cuts the interest to $2,010: $1,234 saved and 16 months sooner.
The effect is even bigger when the payment is small. At $150 a month the same debt would take 9 years 11 months and cost $9,768 in interest; an extra $50 brings it down to 5 years 4 months and $4,774.
What each extra amount saves
$8,000 at 19% APR with a $250 regular monthly payment.
| Extra per month | Debt-free in | Total interest | Interest saved |
|---|---|---|---|
| None | 3 years 9 months | $3,245 | – |
| $25.00 | 3 years 4 months | $2,807 | $438 |
| $50.00 | 2 years 11 months | $2,476 | $768 |
| $100 | 2 years 5 months | $2,010 | $1,234 |
| $200 | 1 year 10 months | $1,469 | $1,775 |
| $300 | 1 year 5 months | $1,165 | $2,079 |
Extra payment or a lower rate?
Both shorten repayment, and they work together. An extra payment cuts the balance directly; a lower rate shrinks the interest charged on whatever balance is left. If you can move a high-rate balance to a cheaper loan or a promotional card, then keep paying the same amount, more of every payment goes to principal and the payoff date moves even closer. Check any transfer or origination fee first, and make sure the cheaper rate lasts long enough to matter.
Finding the extra money
- Round up. Paying $300 instead of $250 feels small but, as the table shows, saves hundreds.
- Use windfalls. Tax refunds, bonuses and gifts can go straight to the balance as one-off extra payments.
- Keep a small emergency fund first. Without one, an unexpected bill can end up back on a card at a high rate and undo your progress.
- Stop adding to the debt. The calculator assumes no new charges. If you keep spending on the card, the payoff date moves.
- Check the order of payments. On loans, ask the lender to apply extra money to principal rather than to future payments.
The results assume a fixed rate with interest charged monthly. Card issuers that charge daily interest, or rates that change, will give slightly different figures.
Frequently asked questions
How long will it take to pay off $8,000 at 19% interest?
At $250 a month, 45 months (3 years 9 months), with about $3,245 of interest. Adding $100 a month cuts it to 29 months and $2,010 of interest.
How much interest does an extra payment save?
It depends on the rate and how long the debt would otherwise last. On $8,000 at 19% with a $250 payment, an extra $50 a month saves about $768 and an extra $200 saves about $1,775.
Is it better to pay extra on debt or to save?
Paying off a debt earns you its interest rate, risk-free. At 19% that is far more than a savings account pays. Many people keep a small emergency fund first, then send extra money to high-rate debt.
Why does a small payment take so long?
Most of a small payment goes on interest. $8,000 at 19% is charged about $127 of interest in the first month, so a $150 payment repays only about $23 of principal. That debt would take 9 years 11 months and cost about $9,768 in interest.
Does this work for loans as well as credit cards?
Yes, for any single debt with a fixed rate and payment. For a $15,000 car loan at 7% with a $300 payment, an extra $100 a month shortens it from 60 to 43 months and saves about $809 of interest.