Back to Tools
Debt Payoff Calculator
Debt Payoff Calculator
Plan your journey to financial freedom using the Snowball or Avalanche method
0
Months to Debt Freedom
With consistent monthly payments
Total Interest Paid
$0
Freedom Date
N/A
Principal Paid
$0
Debt Free Countdown
About the Debt Payoff Calculator
Plan how fast you can become debt free. Enter your total balance, the average interest rate and what you can pay each month, and add a one-time lump sum to see how much time and interest it saves.
How to use the Debt Payoff Calculator
- Enter your Total Debt Balance ($) and Average Interest Rate (%).
- Enter your Monthly Contribution ($) and an optional One-time Lump Sum ($).
- Press Run Payoff Simulation to see your payoff date and total interest.
Formula and method
Each month interest is added to the balance at the monthly rate and your payment is subtracted until the balance reaches zero: months = −ln(1 − B × r ÷ P) ÷ ln(1 + r).
Worked example
$8,000 of debt at 15% with $300 a month is repaid in about 33 months with roughly $1,800 of interest. A $1,000 lump sum at the start would cut several months off.
When to use the Debt Payoff Calculator
- Building a realistic plan to become debt-free by a target date.
- Comparing the snowball method (smallest balance first) with the avalanche method (highest rate first).
- Seeing how much sooner you would finish by adding a fixed extra amount each month.
Common mistakes to avoid
- Skipping the minimum payment on other debts while focusing on one. Late fees will undo your progress.
- Not keeping a small emergency fund, which pushes you back onto credit cards when something unexpected happens.
- Choosing a plan that is too aggressive to keep up. Consistency matters more than speed.
Tips
- List every debt with its rate and pay the highest rate first while making minimums on the rest.
- Direct windfalls such as tax refunds and bonuses to the debt.
- Build a small emergency fund so unexpected costs do not send you back to credit cards.
Frequently Asked Questions
Paying off the smallest balance first for quick wins, then rolling that payment into the next debt.
Paying off the highest-interest debt first, which minimises the total interest paid.
Avalanche (highest rate first) saves the most interest. Snowball (smallest balance first) gives quick wins that help many people stay motivated. Either works if you stick with it.
Many advisers suggest building a small emergency fund first, then paying down high-interest debt aggressively.