The formula
How it works
Set a target date to be debt-free and find the monthly payment that gets you there. Choose how many months you want to take, and the calculator works out what you need to pay each month, plus the total interest.
FAQ
How do I become debt-free faster?
Pay more each month — a shorter payoff period means a bigger payment but far less interest. Focusing on the highest-rate debt first (the “avalanche” method) minimises total interest across several debts.
Why does the total interest change so much with time?
The longer a balance sits, the more interest it accrues. Stretching a payoff from two years to four roughly doubles the interest, even though the monthly payment feels easier.
What does APR mean in this calculator?
APR is the annual interest rate on the debt. The calculator divides it by 12 to get the monthly rate used in the payment formula, so make sure you enter the yearly figure, not a monthly one.
What is the difference between the snowball and avalanche methods?
Both mean paying extra toward one debt while covering minimums on the rest. Avalanche targets the highest-rate balance first to save the most interest, while snowball targets the smallest balance first for quicker psychological wins.
What happens if I only pay the minimum?
A minimum payment is usually set to just cover interest plus a sliver of principal, so the payoff can stretch for years and cost far more in interest. Enter a realistic number of months here to see the payment that actually clears the balance on schedule.
How does refinancing to a lower rate help?
Lowering the rate reduces the monthly payment needed for the same payoff period, or lets you keep the same payment and clear the debt sooner. Re-run the calculator with the new rate to compare the interest saved.
Can I use this for more than one debt at a time?
This tool models a single balance at a time. For multiple debts, run each one separately, or combine them first with a debt consolidation calculator if you plan to merge them into one loan.
About the debt payoff calculator
This calculator turns a debt-free goal into a monthly payment. Instead of asking how long a fixed payment takes, it works the other way: you pick the date you want to be clear of the debt, and it tells you the payment that achieves it. That makes it ideal for building a repayment plan around a deadline — the end of the year, before a big purchase, or simply as fast as you can afford.
How to use it
Enter your debt balance, its interest rate, and the number of months in which you want to clear it. The calculator returns the monthly payment required and the total interest you will pay over that time. For example, a $10,000 balance at 15% paid off in 24 months needs about $485 a month, with roughly $1,600 of interest. Shorten the timeline to see how a higher payment cuts the interest.
The formula
The required payment is the amortization formula solved for the payment: , where is the balance, is the monthly interest rate (the APR divided by 12) and is the number of months you choose. The total interest is that payment times the number of months, minus the original balance. A shorter term raises the payment but lowers the interest.
Where it is used
People use it to build a concrete plan for getting out of debt, especially credit cards and personal loans, by committing to a payoff date. Financial counsellors use the same maths to design repayment schedules, and it pairs well with debt-consolidation and snowball or avalanche strategies. Setting a target and seeing the payment it demands is a powerful motivator for tackling debt head-on.