How to Use the Debt Payoff Calculator
- Enter the balance, interest rate and minimum payment for each debt. Leave unused debts at zero.
- Enter the extra amount you can add each month.
- Choose avalanche or snowball.
- Press Calculate and review the payoff order and timeline.
- Switch methods to compare.
Formula
Each month, for each debt: interest = balance × rate ÷ 12 Pay each minimum, then apply the remaining budget to the target debt. Budget = sum of minimums + extra payment (held constant) Avalanche target: highest rate. Snowball target: lowest balance.
Example Calculation
Three debts totaling $36,500 with minimums of $665 and an extra $200 a month give a budget of $865. The avalanche method pays the 22.99% card first. The plan clears all debts in a little over four years, and compared with minimums only, it saves several thousand dollars in interest.
What Is a Debt Payoff Calculator?
It turns several balances into one schedule. Instead of guessing how long it will take, you see a payoff order, a date and the interest cost under different strategies.
Snowball vs Avalanche
The avalanche method sorts by interest rate, paying the most expensive debt first. The snowball method sorts by balance, eliminating small debts quickly. The interest difference depends on how far apart your rates are and how large the balances are; sometimes it is small.
Where to Find Extra Money
- Review subscriptions and recurring bills.
- Apply raises or bonuses to debt before lifestyle spending.
- Sell items you no longer use.
- Use the budget calculator to find a realistic monthly amount.
Tips
- Automate the total payment to the same day each month.
- Keep a starter emergency fund to avoid new borrowing.
- Recalculate whenever a rate or balance changes.
Common Mistakes
- Letting the total payment fall when a debt is paid off instead of rolling it forward.
- Ignoring a high-rate debt because its balance is large.
- Taking on new debt while paying off old debt.