This debt payoff calculator helps you see how long it will take to repay your debt. If you have multiple sources of debt at different interest rates this calculator will help you calculate how long it will take to pay off your debt with set payments. This calculator will also help you to see the required payment to be debt free by a specific timeframe.
How this debt payoff calculator works
This debt payoff calculator works by allowing you to enter the current balance as well as interest rate for various types of debt. This will help to calculate a total related to the interest on your debt that you must pay. Here you can provide a expected monthly payment which will then calculate how long it will take for repayment of debt.
You can also provide a timeframe that you want to be debt free in. This will then calculate the required payment to be debt free by the end of the expected period. This calculator will show you a breakdown of the principal and interest paid over the course of the debt being outstanding. This allows you to compare various monthly payment amounts to see how much interest you can save.
You can categorize your debt into various types to help recognize which line each amount relates to such as credit card, automobile, line of credit, overdraft as well as other debt. If you have multiple sources of high interest debt, debt consolidation can help you reduce the total interest rate across all of your debt which can help save on the total interest that would have otherwise been needed allowing you to become debt free faster.
Which debt should I pay off first?
There are two common ways to approach paying off debt which are known as the debt avalanche method and the debt snowball method. The debt avalanche method prioritizes paying off the debt with the highest interest rate. With equal payments this method will pay off debt faster and you will pay less total interest when compared to the snowball method.
The snowball method requires that you pay off your lowest outstanding debt balance first. This method helps you reduce how many sources of debt you have faster than the avalanche method. This method looks to create momentum in paying off debt which will keep you on track and provide you with the motivation needed to payoff all your debt.