Debt Payoff Calculator

A debt payoff calculator can show exactly how much you can save on interest by breaking down the best debt reduction plan for your financial situation.

How much debt do you have?

Before you use a debt repayment calculator, you first need to assess how much debt you have. To find out how much debt you have, create a list of your existing debts and include the following important information:

  • How much you owe on the debt
  • The interest rate you pay on each debt monthly
  • Your loan term for any installment loans (revolving debt like credit cards won’t have set terms)
  • How much you’re paying toward debts each month

Once you have this information, you can use a debt payment calculator to determine the best repayment plan.

Select an option below
I just have one debt
I have more than one debt

How to use our debt payoff calculator

1. Enter loan information

For this step, you’ll need to input the basic information you collected about your existing debt into the debt calculator, including the current balance due, interest rate, and minimum monthly payment.

2. Compare debt repayment options

The debt calculator will display two repayment options — the debt snowball and debt avalanche — and show you the interest savings for each. The snowball repayment method focuses on paying the debt with the smallest balance first, while the avalanche repayment method dials in on the highest interest debt first.

3. Assess the impact of extra payment

You can then use the debt repayment calculator to see how extra payments can help you save money and get out of debt quicker.

4. Determine your debt-free date

For the different options presented in the repayment calculator, you’ll see predictions of when you’ll complete paying off each individual loan or debt account. Having an “end date” can be extremely motivating, so use this information to set a debt payoff schedule. This is one of the big benefits of using a debt repayment calculator.

5. Calculate your interest savings

Now, the best part! The debt calculator will show you how much you can save in interest and estimate how much you’ll pay in interest with each debt reduction strategy.

How our debt payoff calculator works

Let’s walk through an example to see the debt payoff calculator in action. Sandy Spender currently has 4 debts, which include:

  1. Auto loan with a balance of $4,000 and an interest rate of 8%
  2. Credit card #1 with a balance of $2,500 and an interest rate of 17%
  3. Student loans with a balance of $7,000 and an interest rate of 4%
  4. Credit card #2 with a balance of $500 and an interest rate of 16%

Sandy is currently putting $375 a month toward debt and can afford an extra $200 monthly with proper budgeting. By sending that extra $200 each month to the smallest debt first (the debt snowball approach), Sandy can save $981 in interest. But with that extra money funneled toward the highest-interest debt first (the debt avalanche approach), Sandy can save $984 in interest.

debt payoff plans to choosedebt payoff plans to choose
Plus, Sandy discovers that she can get out of debt 24 months sooner by committing to a steady repayment plan. Of course, it will still take her several years to reach the end goal of debt freedom, but with the help of the debt payment calculator, Sandy now has a clear debt payoff schedule and understands the immense savings possible with sticking to a steady payment plan.

How do you calculate debt payoff amounts?

Calculating debt payoff amounts can be tricky. And that’s because when you begin to make larger payments toward debt, you’ll end up paying less in interest over time. It’s wise to use a debt payoff calculator to help you understand the potential savings of paying back what you owe sooner.

For example, let’s say you are paying an installment loan of $1,000. The loan charges 12% interest and has a one-year repayment term. If you pay the loan over the 12-month term, you’ll make monthly payments of $89 and end up paying back a total of $1,068.

But if you wanted to pay off the debt early, say in month two, you’d end up only paying a total of $1,015, or about $15 in interest, leading to savings of more than $50 over the life of the loan.

How to pay off debts faster: Credello’s recommendations

1. Debt snowball

The debt snowball method can help you eliminate debts one by one by focusing on repaying your smallest balance first and then the next smallest balance until you pay off the largest balance. You put as much money as you can toward that smallest balance while continuing to make the minimum monthly payment on each other debt. Once you’ve paid that off, you roll that amount over to your next smallest debt and follow that pattern until you’re debt-free.

This approach is best if you’re motivated by small, quick wins.

2. Debt avalanche

OK, snowballs and avalanches aren’t exactly real-life opposites, but in the debt repayment game, they’re pretty close. The debt avalanche method follows a similar one-at-a-time mindset, but instead of going from smallest to largest balance, you go from the highest-interest account and to the lowest-interest account. Using the debt avalanche is best if you’re patient and confident you can withstand it potentially taking longer to get a victory. The main goal here is to save as much money on interest as possible.

3. Debt consolidation

While anyone can implement a debt repayment plan, debt consolidation is typically only an option for people with better credit scores. A debt consolidation loan can help you streamline your debt into a single monthly payment, presumably with a lower interest rate. Similarly, a balance transfer credit card can help you transfer credit card debt from one or multiple credit cards to another card that has a 0% introductory APR.

Want to see how much more money you can save by consolidating?

Let’s do it. We can match you with consolidation options based on your goals and debt info.

Debt payoff calculator terms and definitions

When it comes to debt repayment calculators and debt in general, there are certain terms that come up frequently and need further clarification. Here are the ones it’s important to know:

  • Balance : The base amount of money borrowed, not including interest.
  • Interest : The amount charged by lender to borrow money.
  • Debt : Money that you owe to someone else, like a lendor or creditor.
  • Debt Payoff Date : The date of your final debt payments that will make you completely debt-free.
  • Annual Percentage Rate (APR) : The cost of interest of credit card payments over the course of a year. A 24% APR means you'll be charged 2% interest each month on your debt balance.

Debt payoff calculator FAQs

How do I pay off debt fast?

There are several ways to pay off debt fast , including:
  • Paying more than the minimum amount due each month
  • Making additional payments each month
  • Utilizing the debt snowball method
  • Utilizing the debt avalanche method
  • Consolidating debt to a single, lower-interest monthly payment

How do I pay off credit card debt fast?

You can pay off credit card debt fast by paying more toward your debt each month. That might mean making additional payments each month or a larger monthly payment that exceeds the amount due.Credit card debt consolidation is another process that can help you pay off debt faster by using a debt consolidation loan or credit card balance transfer. Using a debt calculator can show multiple debt repayment methods and how quickly you’ll be able to pay off credit card debt with each method.

How do I decide which loan to pay off first?

There are two primary debt payoff strategies that can help you decide which loan to pay off first. And using a debt payoff calculator can help you discover which method will save you more money. The debt snowball method starts with the lowest-balance loan first. This approach can typically lead to increased motivation by getting you a quick win. The debt avalanche method begins with the highest-interest debt and is best for maximizing interest savings. Ultimately, the best option is the one you’ll be able to stick with for the long term.

Related: Snowball vs. Avalanche Repayment Methods

How can I become debt-free with a low income?

When you’re working to repay debt with a low income, you’ll need to figure out ways to decrease expenses or increase income. You can decrease monthly spending by cutting out non-essentials and living from a well-thought-out budget. To increase income, consider asking for a raise at work or temporarily picking up a part-time job or side hustle until you reach debt freedom. Even putting $50 or $100 toward debt each month makes a big difference. And using a debt repayment calculator can show you the impact of those smaller amounts on what you’ll pay over time.

How long will it take me to pay off my debt?

The best way to understand how long it will take to pay off debt is to use a debt payoff calculator. A debt calculator can help guide you through organizing your debt, assessing various payment options, and choosing the one that will maximize savings and get you to your debt-free date faster.

How do I create the best debt payoff schedule?

Using a debt payoff calculator is one of the most helpful ways to create a debt payoff schedule. You’ll be able to understand how much you can save on each loan and view an estimated payoff date. Then, once you set up your debt payments according to the plan, you’ll know your debt payoff date ahead of time and can schedule other financial goals accordingly.