Balance over time
Yearly breakdown
The formula
How it works
Each month interest is added to your balance and your payment is subtracted. Anything above the interest chips away at principal — so even small extra payments can shave months or years off the payoff date.
FAQ
Why won’t my balance ever clear?
If your payment is smaller than the monthly interest, the balance grows. Raise the payment above the interest to make progress.
Do extra payments really help?
A lot — extra money goes straight to principal, which lowers every future interest charge.
How is the payoff time calculated?
The calculator steps through the loan month by month, adding interest to the balance and subtracting your payment, until the balance reaches zero. It counts the months it takes and adds up the interest paid along the way, which handles any payment or rate combination without needing a closed-form formula.
Why does most of my early payment go to interest?
Interest is charged on the full remaining balance, so when the balance is largest the interest portion of each payment is largest too. As the balance shrinks, more of each payment goes toward principal, which is why payoff speeds up later in the schedule.
What happens if I increase my monthly payment?
A higher payment covers the interest and leaves more left over to reduce principal, so the balance falls faster and the total interest paid drops. Even a modest increase can noticeably shorten the payoff time on a high-rate balance.
Should I put extra money toward this debt or save it instead?
If the interest rate on this balance is higher than what you would earn saving or investing the money, paying it down faster usually comes out ahead financially. For low-rate debt, some people prefer to save or invest instead, but that is a matter of priorities as much as math.
How does the interest rate affect the payoff time?
A higher rate means more of each payment is consumed by interest, so the balance falls more slowly and the total interest paid over the life of the debt is much larger. Small rate differences can add up to a big difference in payoff time, especially on large balances.
How the payoff time is worked out
Each month, interest is added to your balance and your payment is subtracted. Whatever is left after covering the interest reduces the principal. The calculator repeats this month by month until the balance reaches zero, counting how long it takes and totalling the interest paid along the way. Each month , where is the monthly rate.
Why extra payments help so much
Because interest is charged on the remaining balance, every extra amount of principal you pay today removes interest from every future month. Even a small recurring overpayment can cut years off the payoff date and save a large sum in interest, especially on high-rate debt like credit cards.
When a loan never pays off
If your monthly payment is smaller than the interest charged that month, the balance grows instead of shrinking and the loan never clears. The calculator flags this so you can raise the payment above the monthly interest.