Create a debt payoff plan. Enter your total debt, interest rate, and monthly payment to see when you'll be debt-free and how much interest you'll pay.
Payoff Time
5y 6m
Total Interest
$15k
Debt-Free By
Oct 2031
Debt costs far more than the original amount borrowed. A $25,000 credit card balance at 18% APR with minimum payments ($500/month) takes over 7 years to pay off and costs over $18,000 in interest — nearly doubling the original debt. Increasing your payment even slightly can save thousands.
The debt avalanche method pays off highest-interest debts first, minimizing total interest paid. The debt snowball method pays off smallest balances first, providing quick psychological wins. Mathematically, avalanche wins. Behaviorally, snowball works better for many people. Choose the method you'll stick with.
Every extra dollar above your minimum payment goes directly to reducing principal. Strategies include: rounding up payments, making bi-weekly payments (one extra payment per year), applying windfalls (tax refunds, bonuses) to debt, and temporarily reducing discretionary spending to create an extra payment.
Monthly Interest = Outstanding Balance × (APR ÷ 12)
Each month, interest is calculated on your remaining balance. Your payment covers the interest first, and the rest goes to reducing principal. The calculator tracks this month by month until the balance reaches zero, showing your payoff date, total interest paid, and how the balance declines over time. If your payment doesn't cover the monthly interest, the calculator warns you.
With $25,000 in debt at 18% APR, paying $600/month: monthly interest starts at $375, so only $225 goes to principal. Over time, as the balance shrinks, more of your payment goes to principal. Total payoff takes about 62 months (5+ years) and costs $12,100 in interest. Increasing the payment to $800/month cuts it to 40 months and saves $5,300 in interest.
Try increasing your monthly payment by $100-$200 and watch the timeline and total interest change. Small payment increases often save thousands in interest and years of payments.
If the calculator warns that your payment doesn't cover interest, you need to either increase the payment or find a way to reduce the APR (balance transfer, consolidation loan).
Pay attention to the total interest number — it shows the true cost of debt beyond the original balance. This motivates aggressive repayment.
Use this calculator to compare strategies: what saves more — throwing a $5,000 bonus at the debt as a lump sum, or increasing monthly payments by $200?