Debt Payoff Calculator
Compare two monthly payment plans side by side — see the months, total paid and total interest saved by paying more.
Input Data
Results
At a glance:Compares two fixed monthly payments on the same balance/rate. Monthly interest = balance x annual/12; subtract payment until cleared; outputs months, total paid, total interest per plan, and the 'saved' gap (Plan1 - Plan2). Example: 10,000 at 12%, 400/mo → ~28.0mo, interest ~1,197; 600/mo → ~18.3mo, interest ~972; switching saves ~9.7mo and ~225. Higher payment cuts principal faster, so later interest falls and payoff accelerates — extra payment saves disproportionately. WARNING: Fixed rate, no new spending; payment must exceed monthly interest. Education, not advice.
Formula
Monthly rate r = annual rate / 12.
Each month: interest = balance × r, principal paid = payment − interest.
Repeat until balance ≤ 0; total interest = sum of interest, total paid = balance + total interest.
$$r = \\dfrac{\\text{Annual rate}\\%}{12}\\quad(\\text{Monthly rate})$$$$\:\\; \\text{Monthly payment} > r \\times \\text{Outstanding balance}$$How to Use
- Enter the debt balance and annual rate.
- Enter two monthly payments (Plan 1 lower, Plan 2 higher).
- View months, total paid, total interest for each, and the saved gap.
FAQ
Why does paying more save more than the extra amount?
Because interest is charged on the outstanding principal each month. A higher payment cuts principal faster; as principal falls, the interest next month is smaller, so even more of the payment goes to principal — a compounding effect. The term shortens and total interest drops more than the extra dollars paid, especially on high-rate debt.
Why might the debt 'never be cleared'?
If the monthly payment is ≤ the monthly interest (balance x annual/12), the principal never drops — it may grow. Mathematically the payoff months formula breaks down; this tool flags it. Always pay above the interest to make progress.
How should I choose the extra payment?
Balance affordability against savings. Use this tool to see the trade-off at several levels, then pick the highest payment your budget can sustain — the interest saved is the 'return' on paying early. Keep an emergency fund and don't over-stretch.
Is this the same as the avalanche/snowball method?
No — this compares two overall monthly amounts on a single combined debt. Avalanche/snowball allocate a fixed total across multiple debts (by highest rate or smallest balance). Use this to size the total budget, then split it via avalanche/snowball across debts.
Why might the result differ from my lender's statement?
This model assumes a fixed annual rate, monthly accrual, on-time full payments and no new spending. Real loans may use daily accrual, flat rate vs APR conventions, plus fees/penalties and early-repayment charges. Treat it as a planning estimate; the lender's amortisation schedule is final.
Related Tools
References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.