How to use the debt payoff calculator
Enter each debt with its remaining balance, the monthly payment you make on it and its interest rate. Up to twelve debts fit; click Show more debts for rows seven to twelve. Add any extra money you can put toward your debts every month, every year or once, and choose what happens to the payment of a debt once it is paid off. The calculator shows when you will be debt free, the total interest, the interest saved by the extra payments, a plan for each debt and a graph of the balances.
How the payoff plan works
The calculator uses the debt avalanche method. Every month each debt is charged its APR ÷ 12 on its balance and gets its regular payment, and all extra money goes to the debt with the highest interest rate. When that debt is paid off, its payment and the extra money move on to the debt with the next highest rate, until everything is paid.
Debt payoff example
auto loan of $25,000 at 4.9% with a $519 payment, home mortgage of $250,000 at 4% with a $1,800 payment, credit card 1 of $6,000 at 18.99% with a $150 payment, and credit card 2 of $3,000 at 16.99% with a $60 payment: $284,000 of debt and $2,529 of payments a month. With an extra $100 a month and the payments of paid-off debts moved on, everything is paid off in 11 years and 4 months with $72,852.87 of interest. Without the extra $100, it takes 12 years and $79,432.12 of interest, so the extra payment saves $6,579.24.
| Debt | Rate | Paid off after | Interest paid |
|---|---|---|---|
| Credit card 1 | 18.99% | 2 years and 7 months | $1,606.85 |
| Credit card 2 | 16.99% | 3 years and 3 months | $1,317.02 |
| Auto loan | 4.9% | 4 years | $2,801.51 |
| Home mortgage | 4% | 11 years and 4 months | $67,127.49 |
The credit cards, with the highest rates, are paid off first; the mortgage, with the lowest rate, gets its regular payment until the end.
What extra payments save
| Extra every month | Debt free in | Total interest | Interest saved |
|---|---|---|---|
| $0 | 12 years | $79,432.12 | $0.00 |
| $100 | 11 years and 4 months | $72,852.87 | $6,579.24 |
| $250 | 10 years and 7 months | $66,458.52 | $12,973.60 |
| $500 | 9 years and 6 months | $58,774.59 | $20,657.53 |
| $1,000 | 7 years and 11 months | $48,190.19 | $31,241.93 |
For the debts of the example, with the payments of paid-off debts moved on.
Extra payments
- Every month: a fixed amount on top of the regular payments.
- Every year: for example a tax refund or a yearly bonus, paid in the first month and every 12 months after.
- One time: a single amount in a month you choose, such as money from selling a car.
Move the payment on, or stop paying it?
When a debt is paid off, you can keep paying the same total and move that debt's payment to the next one, or stop paying it and keep the money. Moving it on is the snowballing effect that makes the avalanche method work: in the example, stopping the payments of paid-off debts stretches the plan from 11 years and 4 months to 14 years and 10 months and raises the interest to $88,795.97.
Avalanche or snowball?
The avalanche method pays the highest interest rate first and always costs the least interest. The snowball method pays the smallest balance first instead. It usually costs more, but the first debts disappear sooner, which keeps some people going. The best plan is the one you will stick to.
Related calculators
For credit cards only, with one monthly budget, use the credit cards payoff calculator. To see whether one new loan beats your debts, try the debt consolidation calculator, and to pay a mortgage off faster, the mortgage payoff calculator.