Debt Payoff Calculator

How this debt payoff calculator works

The engine here is identical to the loan payoff calculator: it runs a month-by-month simulation where interest accrues on your current balance, your payment covers that interest first, and whatever is left reduces the principal. Add an extra monthly payment or a one-time extra payment, and the calculator runs a second baseline scenario with no extra payments so it can show you exactly how much time and interest those extra dollars actually save, not just your new payoff date on its own.

This framing is meant for any personal debt with a fixed balance and a set payment, credit card debt you are paying down at a fixed amount each month, a personal loan, medical debt, or a private loan from a family member. If you are working through a mortgage, auto loan or student loan specifically, the loan payoff calculator has the same engine with labels built around that.

The debt snowball method

If you have more than one debt, the snowball method has you list every debt from smallest balance to largest, ignoring the interest rate entirely, and put every spare dollar toward the smallest one while paying the minimum on everything else. Once the smallest is gone, you roll its entire payment into the next-smallest, and so on, building momentum (and motivation) as each balance disappears. This calculator handles one debt at a time, so the way to use it for a snowball plan is to run each debt through it in order, starting with the smallest, using the extra-payment field to represent the freed-up payment from whatever debt you just paid off.

The debt avalanche method

The avalanche method is the mathematically optimal version of the same idea: instead of ordering debts by balance, you order them by interest rate, highest first, and put every spare dollar toward the highest-rate debt while paying minimums on the rest. Because interest is what actually costs you money over time, paying off the highest-rate balance first saves the most in total interest, even though it can take longer to see a balance hit zero than the snowball method does. Run each of your debts through this calculator individually, highest rate first, to see the interest savings the avalanche approach gives you for your specific numbers.

Snowball vs. avalanche: which saves more?

Avalanche almost always saves more in total interest, because it targets the debt actually costing you the most per dollar owed. Snowball can still be the better real-world choice for a lot of people, because eliminating a whole balance (even a small one) fast provides a concrete win that keeps momentum going, and a debt-payoff plan you actually stick with beats a mathematically optimal one you abandon after two months. Run your highest-rate debt and your smallest-balance debt through this calculator separately with the same extra-payment amount, comparing the interest-saved and time-saved numbers side by side is the clearest way to see the real gap between the two approaches for your own situation.

A worked example

Say you have a $6,000 credit card balance at 22% APR with a $220/month payment, and you can add $150 extra each month. Without the extra payment, that balance alone takes 3 years 3 months to clear and costs about $2,400 in interest. Adding the $150/month extra payment cuts it down to 1 year 8 months, over a year and a half faster, and saves more than $1,200 in interest, money that stays in your pocket instead of going to the card issuer. Plug your own numbers into the calculator above to see the equivalent for your actual balance and rate.

Why interest rate matters more on debt than on a mortgage

Credit card and personal-loan interest rates are typically far higher than mortgage or auto-loan rates, often 15-25% APR versus 5-8% for secured loans. That gap means the interest-savings effect of an extra payment is proportionally much larger on high-rate debt: the same $100 extra payment removes far more future interest from a 22% balance than it would from a 6% mortgage, simply because more interest was accruing on that balance to begin with. This is the core logic behind the avalanche method above, and it is also why paying down high-rate debt is usually a better use of extra money than making extra payments on a low-rate mortgage, dollar for dollar, the high-rate debt is costing you more.