When will you be
debt-free?

Field guide

How to calculate your payoff date.

Every month, your lender applies two things to your balance: an interest charge (balance × monthly rate) and your payment. The payment first satisfies the interest, then reduces the principal. Because the balance falls each month, the interest charge also falls, so more of each fixed payment goes toward principal over time. That compounding effect is why extra payments early in a loan save disproportionately more interest than the same payment made late.

The formula for months to payoff given a fixed payment P, balance B, and monthly rate r is:

This calculator runs that math month-by-month rather than using the closed-form solution, so the final payment is trimmed to exactly what remains, giving you a precise total interest figure rather than an approximation.

Snowball vs. Avalanche: two strategies for multiple debts.

If you carry more than one debt (credit cards, personal loans, car payments), your total monthly payment is fixed but you can allocate it differently across accounts. Two strategies dominate personal finance advice:

The Avalanche method (mathematically optimal)

Pay the minimum on every debt, then direct all extra money toward the debt with the highest interest rate. Once that account is paid off, roll its payment onto the next-highest rate, and so on.

The Avalanche method minimizes total interest paid and total time in debt. For someone carrying a 24% APR credit card and a 6% car loan, attacking the credit card first saves materially more interest than the reverse; the math is unambiguous. If you’re primarily motivated by saving money, Avalanche wins on every metric.

The Snowball method (psychologically powerful)

Pay the minimum on every debt, then direct all extra money toward the debt with the smallest remaining balance: regardless of interest rate. When that account hits zero, roll that payment onto the next-smallest balance.

The Snowball method typically costs more in total interest, sometimes , because you may be ignoring high-rate debt while paying off low-rate balances. But research consistently shows it works better for many people in practice. Paying off a debt completely delivers a tangible psychological win that Avalanche’s gradual progress on the highest-rate debt can’t match. The behavioral advantage often overcomes the mathematical disadvantage.

Which method is right for you?

If your interest rates are clustered within 3–5 percentage points of each other, the difference in total cost is small; use Snowball for the motivation. If you carry a very high-rate debt (25%+ APR credit card) alongside low-rate debt (5% car loan), the Avalanche cost advantage grows large enough that it’s worth choosing Avalanche even if it feels slower. A hybrid works too: knock out one small balance to get a Snowball win, then switch to Avalanche logic.

How extra payments change the math.

Extra payments hit the principal directly; they don’t reduce next month’s payment, they shorten the loan’s life. Because the loan compounds on the remaining principal, eliminating principal early eliminates all future interest that would have been charged on it. That’s why paying an extra $100/month on a high-rate credit card can save many times $100 × n in total interest.

A worked example: $8,500 balance at 22.99% APR.

• At $200/mo: 66 months to payoff, $4,700 in total interest.
• At $300/mo: 36 months to payoff, $2,300 in total interest. ($2,400 saved, 30 months sooner.)
• At $500/mo: 20 months to payoff, $1,200 in total interest. ($3,500 saved, 46 months sooner.)

Each extra $100/month doesn’t just save $100; it eliminates the compounding interest on principal that would have existed for months or years.

Why credit card debt is uniquely expensive.

Credit cards compound interest monthly at rates typically between 18–30% APR. On a $10,000 balance at 24% APR, making only a 2% minimum payment ($200/month at the start, declining as the balance falls) can take over 20 years to pay off and cost nearly $15,000 in interest: more than the original debt.

The reason is the declining minimum payment trap: as the balance falls, so does the minimum payment. A $200 minimum in month 1 becomes $150, $120, $90; the lender continuously reduces the required payment in proportion to the balance, which extends the loan life while maximizing total interest collected.

Fixing your payment at a constant dollar amount (even at the original minimum) instead of letting it decline with the balance is the single highest-impact change a credit-card borrower can make without changing the interest rate.

Disclaimer

This calculator assumes a fixed interest rate and consistent monthly payments with no additional charges, fees, or balance changes. Actual payoff timelines depend on your lender’s billing cycle, any fees, and whether you add new purchases to the balance.