Debt Payoff Calculator
Calculate how long to pay off debt and how much interest you will pay.
Two Proven Debt Payoff Strategies
The Avalanche method targets the highest-interest debt first while paying minimums on others. Mathematically optimal — it minimizes total interest paid. Best for disciplined people focused on saving the most money.
The Snowball method targets the smallest balance first regardless of interest rate. Psychologically powerful — quick wins build momentum. Research by Harvard Business Review found the snowball method leads to higher overall debt payoff completion rates, even if it costs slightly more in interest.
The best method is the one you will actually stick with.
How Extra Payments Accelerate Payoff
Extra payments have a disproportionate impact because they reduce the principal, which reduces the interest charged in all future months. On a $10,000 credit card at 20% APR with a $250 minimum payment, it would take 79 months and cost $9,643 in interest. Adding just $100/month cuts that to 43 months and $4,609 in interest — saving $5,034 and 36 months.
Always make sure extra payments are applied to principal, not future payments (call your lender to confirm).
The True Cost of Minimum Payments
Credit card minimum payments are designed to maximize interest income for the lender, not to help you pay off debt. Paying only the minimum on a $5,000 balance at 24% APR can take over 20 years to pay off and cost more in interest than the original balance.
As a rule: never carry a credit card balance at high interest rates if you can avoid it. The guaranteed return of paying off 20–25% APR debt beats almost any investment.
Frequently Asked Questions
Should I use avalanche or snowball method?
Avalanche saves the most money mathematically. Snowball provides faster psychological wins. If you have trouble staying motivated, start with snowball. If you are highly disciplined and the interest difference is large, use avalanche. You can also hybrid: start with snowball to build momentum, then switch to avalanche.
Should I invest or pay off debt first?
Always get any employer 401k match first (free money). Then pay off high-interest debt (above ~7% APR) before investing — paying off 20% APR debt is equivalent to a guaranteed 20% return. For debt below 5% APR, investing typically wins long-term. Between 5–7% is a judgment call.
What is debt consolidation and does it help?
Debt consolidation combines multiple debts into one loan, ideally at a lower interest rate. It can reduce monthly payments and total interest. However, it only works if you stop accumulating new debt — otherwise you end up with both the consolidation loan and new balances.