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Debt Payoff Calculator
Enter your total debt balance, average interest rate, and monthly payment to see how long until you're debt-free and how much interest you'll pay. Increase your payment to see the acceleration effect.
The True Cost of Minimum Payments
Credit card companies set minimum payments low (typically 2-3% of balance) for a reason: it maximizes the interest they collect from you. On a $25,000 balance at 18% APR, minimum payments mean you'll pay nearly $15,000 in interest — 60% of the original debt — and it takes over 6 years. Every dollar above the minimum goes directly to reducing your principal, which reduces next month's interest charge, creating an accelerating payoff effect. Even an extra $100/month can cut your payoff time by nearly 2 years.
Frequently Asked Questions
Snowball or avalanche — which is better?
Mathematically, the avalanche method (highest interest first) saves the most money. But research from Harvard shows the snowball method (smallest balance first) has higher completion rates because eliminating a debt quickly provides motivation. Choose avalanche if you're disciplined with numbers; choose snowball if you need motivational wins.
Should I invest or pay off debt?
General rule: if your debt interest rate exceeds your expected investment return (after tax), pay off the debt first. Credit card debt at 18-25% should always be paid first. Student loans at 5% or a mortgage at 6.5% are debatable — many people do both simultaneously.
Does paying more than the minimum help?
Dramatically. On a $25,000 credit card balance at 18% APR, paying the $500 minimum takes 6+ years and costs $15,000+ in interest. Adding just $200 extra per month cuts the payoff to 3 years and saves over $8,000 in interest. Every extra dollar goes directly to principal.
