How to use the debt payoff calculator
Pull up your latest statements. For each debt you need the balance, the annual interest rate and the payment you plan to make every month, which can't be lower than the required minimum. Use simple labels like "Store card". Never type account numbers here. Leave a balance at zero if you have fewer than three debts.
Then pick a strategy and add any extra you can pay every month. Every debt gets its planned payment first, and the extra goes to the debt your strategy picks.
- Enter a short name, balance, annual rate and planned monthly payment for each debt.
- Choose avalanche (highest rate first), snowball (smallest balance first) or the order you entered.
- Add an extra monthly amount and any one-time lump sum you have now.
- Set a target number of months to see the extra payment that hits it.
- Optionally add your monthly take-home pay to see what share goes to these debts.
- Press Calculate and check the payoff month for each debt, the strategy comparison and the schedule.
Example: three debts and $850 a month
Take a $12,000 credit card at 12% with a $350 payment, a $4,500 store card at 22.9% with a $150 payment, and an $8,000 personal loan at 7.5% with a $200 payment. Those payments add up to $700. Add $150 extra and the monthly debt budget is $850.
With the avalanche method, everything is paid off in 34 payments. Total interest is about $4,257.62 and you pay $28,757.62 in all. In the first month about $255.88 goes to interest and about $594.13 cuts the balances.
| Debt | Balance and rate | Paid off | Interest on this debt |
|---|---|---|---|
| Store card | $4,500 at 22.9% | Month 18 | $852.12 |
| Credit card | $12,000 at 12% | Month 31 | $2,290.06 |
| Personal loan | $8,000 at 7.5% | Month 34 | $1,115.44 |
| All three | $24,500 | 34 payments | $4,257.62 |
How the payoff math works
Each month, every open debt gets a month of interest at its own rate. Then every debt gets its planned payment, and whatever's left of your monthly budget goes to the target debt. A lump sum is applied before the first month's interest.
When a debt is paid off, your total budget stays the same. The payment you were making on it rolls to the next target. This rollover is what makes the later debts disappear faster, and it only works if you keep paying the full amount after each payoff.
Monthly rate for each debt = annual rate / 100 / 12Monthly interest = balance x monthly rateMonthly debt budget = sum of planned payments + extra paymentMoney left after planned payments goes to the target debtA paid-off debt's payment stays in the budget and rolls to the next target
Debt snowball vs avalanche on the same budget
The only thing that changes between strategies is where the leftover money goes. Balances, rates, planned payments and the $850 budget stay the same, so the comparison is fair.
In the example, the store card is both the smallest balance and the highest rate, so both methods attack it first and clear it in month 18. After that they split. Avalanche moves to the 12% credit card. Snowball moves to the smaller $8,000 loan and clears it in month 29, two months before avalanche clears its second debt. That early win costs about $112.64 more interest.
| Strategy | Pays first | Debt-free in | Total interest |
|---|---|---|---|
| Debt avalanche | Highest rate | 34 payments | $4,257.62 |
| Debt snowball | Smallest balance | 34 payments | $4,370.26 |
| Entered order | Debt 1, 2, then 3 | 35 payments | $4,852.61 |
How much does an extra payment save?
Paying only the $700 of planned payments, the example takes 44 payments and about $6,234.00 of interest. Adding $150 a month cuts 10 payments and about $1,976.38 of interest. Raising the budget 20% to $1,020 gets you out in 28 payments.
A lump sum works the same way, just all at once. Put a $2,500 tax refund toward the store card before month one, keep paying $850, and the plan finishes in 30 payments instead of 34, with interest falling to about $2,957.34. Keep enough cash for emergencies before you send a big payment, or you may end up borrowing again.
| Monthly budget | Lump sum | Debt-free in | Total interest |
|---|---|---|---|
| $700 | $0 | 44 payments | $6,234.00 |
| $850 | $0 | 34 payments | $4,257.62 |
| $850 | $2,500 | 30 payments | $2,957.34 |
| $1,020 | $0 | 28 payments | $3,285.18 |
Find the payment for your debt-free date
Enter a target and the calculator finds the smallest extra monthly amount that clears every debt in time. It keeps your balances, rates, planned payments, strategy and lump sum as they are.
In the example, being debt-free in 36 months takes about $108.77 extra, or $808.77 a month in total, with avalanche. Round up to a payment you can make every month. If the number doesn't fit your budget, push the date out instead of borrowing to hit it.
Limits and when to double-check
The calculator uses each annual rate divided by 12 and assumes no new charges, fees, rate changes or missed payments. Real lenders may charge daily interest, post payments on different dates or apply payments in their own order, so compare the first month with your statements. Credit cards with promo rates, student loans with special repayment plans, and loans with prepayment terms need their own checks.
The optional income figure is just your debt budget divided by take-home pay. In the example, $850 is 17% of $5,000. Lenders work out debt-to-income from gross income and their own rules, so this isn't that number. If you can't make required payments, contact your lenders early, and be wary of debt relief companies that want fees up front.
- Confirm each required minimum on your latest statement.
- Check whether a debt has a promo rate, variable rate or prepayment fee.
- Ask lenders how extra payments are applied before you send them.
- Recalculate when a rate, balance, minimum or your budget changes.
Sources
These official U.S. consumer resources cover payoff strategies, budgeting, credit counseling, collections and debt relief scams.