Debt Payoff Calculator
Calculate debt payoff timeline and total interest from balance, rate, and monthly payment.
Returns months to payoff and comparison of minimum vs extra payments.
Debt payoff calculators model two key decisions: how long it takes to eliminate a debt with a given monthly payment, and how much total interest you will pay over that period. The math uses the same loan amortization formula used by banks — because that is exactly how banks calculate your minimum payment.
Monthly payment needed to pay off in N months: M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]
Where:
- M = monthly payment
- P = current outstanding balance
- r = monthly interest rate = APR ÷ 12
- n = desired number of months to pay off
Months to pay off at a fixed payment: n = −ln(1 − (P × r / M)) ÷ ln(1 + r)
Total interest paid: Interest = (M × n) − P
What each variable means:
- Balance (P): the current amount owed, not the original loan amount. Enter today’s outstanding balance.
- APR (r): the annual percentage rate on the debt. Credit cards: 20–30%. Personal loans: 8–20%. Auto loans: 5–12%.
- Monthly Payment (M): must exceed the minimum interest-only charge (P × r) or the balance never decreases.
Snowball vs Avalanche methods:
- Debt Avalanche: pay highest-APR debt first. Mathematically optimal; minimizes total interest paid.
- Debt Snowball: pay smallest balance first regardless of rate. Psychologically powerful; faster early wins maintain motivation.
Reference — credit card minimum payment trap: $5,000 balance at 24% APR, paying only the 2% minimum (~$100/month):
- Payoff time: 31 years
- Total interest paid: $8,400+
Same balance, paying $250/month:
- Payoff time: 25 months
- Total interest paid: $1,100
Worked example: Balance: $8,500. APR: 22%. Target: 24 months.
r = 22% ÷ 12 = 0.01833/month
M = 8,500 × [0.01833 × (1.01833)^24] ÷ [(1.01833)^24 − 1] = 8,500 × [0.01833 × 1.5393] ÷ [0.5393] = 8,500 × 0.05225 = $444.13/month
Total paid = $444.13 × 24 = $10,659 Total interest = $10,659 − $8,500 = $2,159