Personal Debt Payoff Calculator
Use this calculator to explore different strategies for paying down multiple debts and see how extra payments can accelerate your debt-free journey. Choose between the Debt Snowball and Debt Avalanche methods to find the approach that best suits your financial goals.
Your Debts
Enter details for up to four debts. Leave fields blank for debts you don't have.
Debt 1
Debt 2
Debt 3
Debt 4
Payoff Strategy
Debt Snowball (Smallest Balance First) Debt Avalanche (Highest Interest Rate First)
Understanding Your Debt Payoff Options
Managing multiple debts can feel overwhelming, but with a clear strategy, you can accelerate your path to financial freedom. This Personal Debt Payoff Calculator helps you visualize the impact of different repayment methods and additional payments on your overall debt burden.
What is a Personal Debt Payoff Calculator?
A personal debt payoff calculator is a tool designed to help individuals understand how long it will take to pay off their various debts (like credit cards, personal loans, auto loans, or student loans) and how much interest they will pay in the process. More importantly, it allows you to compare different repayment strategies and see the significant impact of making extra payments.
Debt Snowball vs. Debt Avalanche: Which is Right for You?
There are two primary strategies for tackling multiple debts, each with its own psychological and financial benefits:
1. Debt Snowball Method
The Debt Snowball method focuses on psychological wins. Here's how it works:
- List all your debts from the smallest balance to the largest.
- Make minimum payments on all debts except the one with the smallest balance.
- Apply any extra money you have towards the smallest debt.
- Once the smallest debt is paid off, take the money you were paying on that debt (its minimum payment plus any extra payment you were applying) and add it to the minimum payment of the next smallest debt.
- Continue this process, "snowballing" your payments, until all debts are paid off.
Benefit: Provides quick wins and motivation as you pay off smaller debts rapidly. This psychological boost can help you stay committed to your debt-free journey.
2. Debt Avalanche Method
The Debt Avalanche method focuses on saving the most money on interest. Here's how it works:
- List all your debts from the highest annual interest rate to the lowest.
- Make minimum payments on all debts except the one with the highest interest rate.
- Apply any extra money you have towards the debt with the highest interest rate.
- Once the highest interest rate debt is paid off, take the money you were paying on that debt (its minimum payment plus any extra payment you were applying) and add it to the minimum payment of the next highest interest rate debt.
- Continue this process until all debts are paid off.
Benefit: Saves you the most money in interest over the long run because you're targeting the most expensive debts first.
How to Use This Calculator
- Enter Your Debts: Provide the name, current balance, annual interest rate, and minimum monthly payment for each of your active debts. You can enter up to four debts. If you have fewer, simply leave the unused fields blank.
- Specify Additional Payment: Enter any extra amount you can consistently afford to pay towards your debts each month. Even a small amount can make a big difference!
- Choose Your Strategy: Select either "Debt Snowball" or "Debt Avalanche" from the dropdown menu.
- Calculate: Click the "Calculate Payoff" button to see your estimated payoff time and total interest paid under your chosen strategy.
The Power of Extra Payments
As you'll see from the calculator, even a modest additional monthly payment can dramatically reduce your payoff time and the total interest you pay. This is due to the magic of compound interest working in your favor (or against you, if you only pay minimums). Every extra dollar you put towards your principal reduces the amount on which interest is calculated in subsequent months.
Realistic Example:
Let's consider the example debts pre-filled in the calculator:
- Credit Card A: $5,000 balance, 24% APR, $100 min payment
- Credit Card B: $10,000 balance, 18% APR, $200 min payment
- Auto Loan: $15,000 balance, 6% APR, $300 min payment
- Student Loan: $20,000 balance, 4% APR, $250 min payment
If you have an additional $100 to pay each month:
Using Debt Snowball: You'd first tackle Credit Card A ($5,000). Once paid off, its $100 minimum payment (plus your $100 extra) would roll to Credit Card B, and so on. This method provides quicker psychological wins.
Using Debt Avalanche: You'd first tackle Credit Card A ($5,000) because it has the highest interest rate (24%). Once paid off, its $100 minimum payment (plus your $100 extra) would roll to Credit Card B (18%), and so on. This method saves you the most money on interest.
Run the calculator with these numbers to see the difference!
Taking control of your debt is a significant step towards financial well-being. Use this tool to empower your decisions and accelerate your journey to being debt-free.
Payoff Results (' + (payoffStrategy === 'snowball' ? 'Debt Snowball' : 'Debt Avalanche') + ')
'; if (totalMonths >= maxMonthsLimit) { resultHtml += 'Warning: It may take longer than 100 years to pay off your debts with the current inputs. Consider increasing your payments.'; } var years = Math.floor(totalMonths / 12); var months = totalMonths % 12; resultHtml += 'Total Payoff Time: ' + years + ' years and ' + months + ' months'; resultHtml += 'Total Interest Paid: $' + totalInterestPaidOverall.toFixed(2) + ''; resultHtml += 'Debt Breakdown:
- ';
for (var k = 0; k < simulationDebts.length; k++) {
var d = simulationDebts[k];
var debtYears = Math.floor(d.paidOffMonth / 12);
var debtMonths = d.paidOffMonth % 12;
resultHtml += '
- ' + d.name + ': Paid off in ' + debtYears + ' years and ' + debtMonths + ' months. Total Interest: $' + d.totalInterestPaid.toFixed(2) + ' '; } resultHtml += '