Debt Payoff Calculator
Payoff time
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Total interest
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Impact of extra payment
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Total paid: —
Enter your balance, rate, and payment above
How Debt Payoff Is Calculated
Each month, interest accrues on your remaining balance. Your payment first covers that interest, then reduces the principal. As the balance shrinks, so does the interest charge — meaning more of each subsequent payment goes to principal. The number of months until the balance hits zero is:
Why Extra Payments Matter So Much
On a high-interest debt, the difference between a minimum payment and a slightly higher one is dramatic. On an $8,500 credit card balance at 19.99%, paying $250/month takes 48 months and costs $3,475 in interest. Bumping to $350/month cuts it to 30 months and saves $1,300 — for an extra $100/month over a shorter period.
Every extra dollar you put toward principal today eliminates the interest it would have accumulated for every future month — a compounding benefit that works in your favor.
Debt Payoff Strategies
Avalanche method
Pay minimums on all debts, then put every extra dollar toward the highest-interest debt first. Mathematically optimal — minimizes total interest paid.
Snowball method
Pay minimums on all debts, then attack the smallest balance first regardless of rate. Builds momentum through quick wins. Slightly more interest paid overall but many people find it more motivating.
Balance transfer
Move high-interest credit card debt to a 0% intro APR card. Eliminates interest during the promotional period (typically 12–21 months). Watch for balance transfer fees (usually 3–5%) and the rate that kicks in afterward.
Frequently Asked Questions
What if my payment barely covers the interest?
If your monthly payment is equal to or less than the monthly interest charge, you'll never pay off the debt — the balance will stay flat or grow. The calculator will show "Never" in this case. You must pay more than the interest each month to make progress. Even a few extra dollars helps.
Should I pay off debt or invest?
If your debt interest rate is higher than expected investment returns (roughly 7–10% for a diversified equity index), paying off debt is the better financial move — it's a guaranteed return equal to the interest rate. At lower rates (mortgages, student loans under 5%), investing often wins long-term. Always capture any employer 401(k) match first — it's an instant 50–100% return.
Does this work for credit cards?
Yes. Enter your current balance, APR (the annual percentage rate on your statement), and whatever monthly payment you're planning. Credit card interest compounds daily, so the actual total may differ slightly from this estimate, which uses monthly compounding.