Debt & Credit
Debt Payoff Calculator
Enter multiple debts with their balances, rates, and minimum payments to see when each will be paid off, total interest cost, and when you'll be debt-free.
🔒 All calculations happen instantly in your browser. No data is sent to any server.
How the calculation works
For each debt, the calculator simulates monthly payments:
Monthly Interest = Balance × (Annual Rate ÷ 12)
New Balance = Balance + Interest − Payment
This repeats until balance = 0. Any extra payment amount is split equally across all active debts.
For a smarter payoff strategy that saves more interest, try the Debt Snowball Calculator (smallest balance first) or Debt Avalanche Calculator (highest rate first).
Frequently Asked Questions
- The debt avalanche method (targeting the highest interest rate first) minimises total interest paid. The debt snowball (smallest balance first) keeps motivation high by delivering quick wins. Both outperform making only minimum payments.
- On a $5,000 credit card at 20% APR with a 2% minimum payment, making only minimums takes over 30 years and costs more than $9,000 in interest — nearly double the original balance. Paying even $50 extra monthly saves years and thousands.
- Mathematically: if debt interest rate > expected investment return, pay debt first. High-interest credit card debt (15–25%) should almost always be prioritised over investing. Low-rate mortgage debt (3–7%) may be worth keeping while investing, since long-term market returns historically exceed this.
- A debt consolidation loan replaces multiple debts with a single lower-rate loan. It's beneficial if the consolidated rate is meaningfully lower than your weighted average current rate. Be cautious: extending the term can increase total interest even at a lower rate.
- This calculator splits it equally as a simple estimate. In practice, the debt snowball and avalanche methods direct all extra payment to one debt at a time — which is more effective. Use those calculators for optimised strategies.