When will you be debt-free, and how much interest will you pay?
Put in each debt with its balance, yearly interest rate and minimum payment, and what you can pay on top of the minimums. The calculator pays every minimum, puts the rest on one debt at a time, and shows the month you are debt-free and the interest you pay, for two orders: highest interest rate first and smallest balance first.
How long will it take to pay off your debts?
Add up what you pay each month: every minimum payment, plus any extra. Each month, a month’s interest is added to every debt, every minimum is paid, and what is left goes to one debt at a time. When a debt is paid off, its minimum moves on to the next one, so you pay the same total every month until the last debt reaches zero. That month is the answer, counted from your first payment, one month from now.
The interest you pay is every month’s interest added up until then. Both depend on which debt gets the money above the minimums first, which is why the calculator works out two orders.
Should you pay the highest rate or the smallest balance first?
The calculator does not choose for you. It works out both orders with your numbers and shows what each one does.
Highest rate first, often called the avalanche method, puts the money above the minimums on the debt with the highest interest rate, then the next highest. Smallest balance first, often called the snowball method, puts it on the debt with the least left to pay, then the next smallest, so a whole debt is paid off sooner.
Compare the interest each order pays, the month you are debt-free in each, and when each debt is paid off. With some debts both orders take them in the same sequence, or come to the same result, and the calculator says so.
What if a minimum payment does not cover the interest?
If a debt’s minimum payment is no more than the interest it is charged in a month, its balance stays the same or grows, and the minimum alone never pays it off. The calculator notes every debt like this, with its first month’s interest beside its minimum.
In either order, such a debt is paid off only once your extra amount, or the payments freed from debts already paid off, reach it. If they never catch up, the calculator says the debts are not paid off within 100 years.
What does an extra amount each month change?
The extra goes, with the minimums, to the first debt in the order. With no extra, only the minimums are paid at first, but the total still stays the same each month: when a debt is paid off, its minimum moves on to the next one. Change the extra amount to see how the month you are debt-free and the interest move with it.
What if your debts are in different currencies?
The calculator works in one currency, and every amount you type is in it. Convert debts in other currencies into that one first, at today’s exchange rate, or work out each currency on its own. The multi-currency net worth calculator shows what amounts in several currencies come to in one.
How does the worked example add up?
You have three debts in US dollars: $5,400 on a credit card at 23.9% a year, with a minimum payment of $160 a month; $2,100 on a personal loan at 11.5%, with $95 a month; and $11,800 on a car loan at 6.9%, with $290 a month. You can pay $200 a month on top of the minimums, so $745 goes to the debts every month.
Highest rate first puts the $200 extra on the credit card: the credit card is paid off in month 18, the personal loan in month 20 and the car loan in month 30. You are debt-free in 30 months and pay $2,646.49 in interest.
Smallest balance first puts the extra on the personal loan: the personal loan is paid off in month 8, the credit card in month 20 and the car loan in month 30. You are debt-free in 30 months and pay $2,877.67 in interest.
Highest rate first pays $231.18 less in interest, and both are debt-free in the same month. Smallest balance first pays off its first debt sooner: in month 8, against month 18.
How is it worked out?
Every month, for each debt still owed:
interest = balance × yearly rate ÷ 12, rounded to the cent
paid each month = every minimum + the extra
down the order = paid each month − the minimums of the debts still owed
The minimums are paid first, and what is left goes to the first debt in the order, then the next. Highest rate first sorts the debts by their rate, highest first; smallest balance first sorts them by what you owe today, smallest first. Where two are level, the other order’s rule decides, then their place in your list.
The calculator assumes every rate and minimum stays as you typed it, that nothing new is added to the debts, and that no fees are charged. A lender may count interest day by day, or change a minimum payment as the balance falls, so its figures can differ a little from these. For a currency with no cents, such as the Japanese yen, every amount is rounded to a whole unit.
Questions
- How do I work out when I will be debt-free?
- List each debt with what you still owe, its yearly interest rate and its minimum monthly payment, and add what you can pay on top of the minimums. Each month, add a month's interest to every debt, pay every minimum, and put what is left on one debt at a time. When a debt is paid off, its minimum moves on to the next one, so the total you pay stays the same. The month the last debt reaches zero is the month you are debt-free, and the debt payoff calculator counts it for you.
- Should I pay off the highest interest rate or the smallest balance first?
- The debt payoff calculator does not choose for you: it shows what each order does with your own numbers. Paying the highest rate first, often called the avalanche method, puts the money above the minimums on the debt that charges the highest rate. Paying the smallest balance first, often called the snowball method, puts it on the debt with the least left to pay, so a whole debt is paid off sooner. Compare the interest each order pays, the month you are debt-free in each, and when each debt is paid off.
- What happens if my minimum payment does not cover the interest?
- Then the minimum alone never pays that debt off: each month the interest added is as large as the payment, or larger, so the balance stays the same or grows. The debt payoff calculator notes every debt like this. In either order, such a debt is paid off only once your extra amount, or the payments freed from debts already paid off, reach it. If they never catch up, the calculator says the debts are not paid off within 100 years.
- Can I put in debts in different currencies?
- No. The debt payoff calculator works in one currency for the whole calculation, and every amount you type is in that currency. If your debts are in different currencies, convert them into one first at today's exchange rate, and keep in mind that the converted amounts move when the exchange rate does. Or work out the debts in each currency on their own.
- What does the debt payoff calculator leave out?
- It assumes that every rate and minimum payment stays as you typed it, that nothing new is added to the debts, and that no fees are charged. It counts a month's interest as the yearly rate divided by 12, rounded to the cent. A lender may count interest day by day, or change a minimum payment as the balance falls, so its own figures can differ from these.
- Is anything I type into the debt payoff calculator sent anywhere?
- No. The debt payoff calculator works everything out in your browser and sends no request of its own. The names, balances, rates and payments you type never leave it.
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See every card and loan beside everything you own.
In Hundo, each card and loan is an account that holds what you still owe, and money owed between you and friends or family sits beside them as IOUs. All of it counts in one net worth, in over 160 currencies, with a chart of how it moves over time. Logging stays quick: when you add a transaction, Hundo already suggests the entries you usually make, ranked from your own history, so one tap fills every field. With Pro, you can ask the built-in AI assistant about your own numbers, such as what you still owe across every card and loan. The tracker is free forever and nothing in it is capped.
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