Debt Payoff Calculator
Create debt payoff plan using snowball or avalanche method. Calculate how long to pay off multiple debts, total interest saved, and optimal payment strategy for debt freedom.
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Debt Information
Sample Debts:
Credit Card 1$5,000.00 @ 19.99%
Credit Card 2$3,000.00 @ 22.99%
Personal Loan$10,000.00 @ 12.5%
Total Debt:$18,000.00
$
Additional payment beyond minimums
Avalanche method targets high-interest debts first, saving more money long-term
Payoff Plan Results
Debt-Free Date
24 months
2.0 years from now
Total Interest
$2,655.11
Total Paid
$20,655.11
📉 Debt Avalanche Strategy
Paying highest interest rate debts first saves the most money but may take longer to eliminate individual debts.
Minimum payments:$540.00
Extra payment:+$500.00
Total monthly:$1,040.00
Time to debt-free:24 months (2.0 years)
📋 Payoff Order (avalanche):
- Credit Card 2
- Credit Card 1
- Personal Loan
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How to Use the Debt Payoff Calculator
Enter your total debt, average interest rate, and monthly payment amount. Choose between avalanche (pay highest interest first) or snowball (pay smallest balance first) strategies. The calculator shows when you'll be debt-free and total interest paid.
Avalanche vs Snowball Comparison
| Factor | Avalanche | Snowball |
|---|---|---|
| Focus | Highest interest | Smallest balance |
| Cost | Lowest | Slightly higher |
| Timeline | Fastest payoff | Similar timeline |
| Motivation | Math-focused | Quick wins |
| Best For | Disciplined savers | Need motivation |
Step-by-Step Debt Payoff Guide
- List all debts: Write down every debt, balance, interest rate, and minimum payment
- Calculate available funds: Determine total monthly amount for debt payments
- Choose strategy: Pick avalanche (save money) or snowball (stay motivated)
- Pay minimums on all but one: Focus extra payments on target debt
- Eliminate one debt: Once paid off, roll that payment to the next target
- Repeat: Continue until all debts are eliminated
- Stay debt-free: Build emergency fund, avoid new debt
Debt Payoff Priority Order
- Payday loans: 300-400% APR - Emergency priority!
- Credit cards: 15-25% APR - High interest, pay ASAP
- Personal loans: 10-20% APR - Medium priority
- Auto loans: 5-10% APR - Lower priority
- Student loans: 3-7% APR - Typically lowest priority
- Mortgage: 6-8% APR - Pay after high-interest debt
Accelerating Debt Payoff
- Increase income: Side gig, overtime, sell unused items
- Reduce expenses: Cut subscriptions, cook at home, reduce discretionary spending
- Use windfalls: Tax refunds, bonuses toward debt
- Balance transfer: Move high-interest debt to 0% APR card (18-21 months)
- Negotiate rates: Call creditors, ask for lower APR
- Refinance: Consolidate to lower rate loan
Common Debt Payoff Mistakes
- ❌ Only paying minimums (you'll be in debt for decades!)
- ❌ Accumulating new debt while paying off old debt
- ❌ No emergency fund (one crisis puts you back in debt)
- ❌ Closing credit cards after payoff (hurts credit score)
- ❌ Taking on risky "get rich quick" schemes to pay debt faster
- ❌ Ignoring retirement savings entirely (balance both if possible)
Credit Score Impact
Paying off debt improves your credit score through:
- Credit Utilization: Lower balances = better score (keep under 30%)
- Payment History: On-time payments = 35% of score
- Account Mix: Managing multiple debt types responsibly
Success Story: Average person who aggressively pays off $30,000 in credit card debt at 18% APR saves $15,000+ in interest and improves their credit score by 100+ points. You can do this!
Frequently Asked Questions
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