How are the interest savings calculated?

The calculator simulates your payoff month by month. Each month, interest accrues on the remaining balance, your payment reduces the balance, and the process repeats. With extra payments, the balance drops faster so less interest accumulates. The savings are the difference between the two scenarios.

What if my minimum payment doesn't cover the monthly interest?

If your payment is less than the monthly interest charge, your balance actually grows over time — this is called negative amortization. The calculator will indicate that the debt cannot be paid off under those terms. You need to increase your payment above the monthly interest amount.

Should I pay extra on my debt or invest instead?

Generally, if your debt interest rate exceeds expected investment returns (after tax), paying off debt first gives a guaranteed "return." For high-interest debt like credit cards (15%+), aggressive payoff almost always wins. For low-interest debt (under 5%), investing may be better.

What is the avalanche vs. snowball method?

Avalanche targets the highest-interest debt first (saves the most money). Snowball targets the smallest balance first (provides quicker wins for motivation). Mathematically, avalanche is optimal, but snowball's psychological boost helps many people stay on track.

Does this calculator handle multiple debts?

This calculator handles a single debt. For multiple debts, enter each one separately to compare payoff timelines. The total interest and months saved are calculated per debt — prioritize the highest-rate debt for maximum savings.

FINFinancial

Debt Payoff

Calculate exactly how long it will take to pay off your debt — and how much you can save by making extra payments. See the total interest you will pay and the months you can shave off your payoff timeline.

Currency

Current Balance

Annual Interest Rate

Minimum Monthly Payment

Extra Monthly Payment(optional)

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Enter values above to see results

How It Works

Formula

I_t = B_{t-1} \times \frac{r}{12}

B_t = B_{t-1} + I_t - P_t

Where

$B_t$: Balance at end of month t
$B_{t-1}$: Balance at end of the previous month
$I_t$: Interest accrued in month t
$P_t$: Payment made in month t (minimum + extra)
$r$: Annual interest rate (decimal)

Enter your current debt balance, annual interest rate, minimum monthly payment, and any extra payment you can make. The calculator simulates the month-by-month payoff, showing how long it takes, how much total interest you will pay, and how many months you save with extra payments compared to minimums only.

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