Debt Payoff Calculator

Debt payoff calculator for multiple balances

Enter each current balance, annual percentage rate, and required minimum payment, then add any amount you can pay above those minimums. The calculator keeps the starting monthly debt budget fixed and rolls freed minimum payments toward the next priority balance. It calculates both the debt avalanche and debt snowball methods from the same inputs so the interest cost and payoff date are directly comparable.

Debt avalanche versus debt snowball

The avalanche method directs extra money to the open debt with the highest APR after every required minimum is paid. This usually reduces interest because the most expensive balance is attacked first. The snowball method targets the smallest open balance, which can produce an earlier first payoff and a visible sense of progress. The Consumer Financial Protection Bureau describes both the highest-interest-rate and snowball strategies and recommends choosing a method you can put into action consistently.

monthly interest = opening balance x APR / 12

fixed monthly debt budget = entered minimum payments + extra monthly payment

How the monthly simulation works

At the start of each modeled month, every unpaid balance receives one month of interest using its entered fixed APR. The plan then makes the entered minimum payment on each open debt. Any money left in the fixed budget goes to the strategy's priority debt. When that debt reaches zero, unused money in the same month moves to the next priority debt. In later months, its former minimum payment remains inside the fixed budget, creating the rollover effect.

Worked debt payoff example

The default example includes a $6,800 credit card at 22.99% APR with a $170 minimum, a $4,000 personal loan at 12% with a $130 minimum, and a $14,250 auto loan at 6.49% with a $285 minimum. Adding $100 creates a fixed $685 monthly budget. The comparison shows whether paying the small personal-loan balance first provides a quick win or whether attacking the high-rate card first saves more interest.

What counts as an extra payment?

Enter only the amount you expect to pay every month in addition to all listed minimums. A tax refund, bonus, or other one-time payment is not the same as a recurring extra payment and is not modeled by this version. Do not commit money needed for rent, utilities, food, insurance, taxes, or a basic emergency reserve. Confirm with each creditor how additional payments are applied and whether a loan has a prepayment penalty.

Why actual results may differ

This is a fixed-rate planning model. Credit-card APRs, minimum-payment formulas, fees, promotional periods, daily interest, statement dates, new charges, payment timing, and creditor allocation rules can change actual payoff results. The calculator assumes no new borrowing and one payment cycle per month. It also assumes every payment arrives on time and that the listed minimums remain part of the same total monthly budget after a debt is paid off.

How to use the payoff comparison

First, verify balances and APRs from current statements rather than memory. Next, enter minimum payments that are at least enough to satisfy the creditor's current requirement. Compare the two strategy rows for total interest and the debt-free month, then inspect the payoff order for the selected detailed plan. A mathematically cheaper plan is useful only if the monthly budget is realistic enough to maintain.

When to seek additional help

If required minimums are already unaffordable, a projection does not solve the cash-flow problem. Contact creditors promptly and consider a reputable nonprofit credit counselor. Be cautious with companies that promise to erase debt, demand large upfront fees, or tell you to stop communicating with creditors. This calculator is educational and is not financial, legal, tax, or credit counseling advice.

Frequently asked questions

Which method saves the most interest?

With the same fixed budget and no special rate changes, directing extra money to the highest APR generally minimizes interest. The results quantify the difference for the exact balances entered.

Why can the two methods have the same payoff month?

A fixed total budget can make the overall duration similar even when the order and interest differ. Rounding and the final partial payment also affect the displayed month.

What if a minimum payment is too small?

The calculator flags plans that fail to reach zero within 100 years. A payment that does not cover accruing interest can allow a balance to grow until it becomes the priority debt.

Should a mortgage be included?

This tool can model a fixed-rate balance, but mortgage escrow, amortization rules, tax considerations, and much longer terms make a dedicated mortgage payoff calculator more appropriate.