Debt Payoff Calculator
Modify the values and click the Calculate button to use
| # | Debt name | Remaining balance | Monthly or min. payment | Interest rate | |
|---|---|---|---|---|---|
| 1. | $ | $ | % | ||
| 2. | $ | $ | % |
Extra payments:
Fixed total amount towards monthly payment?:
If "Yes" is chosen, after a debt has been paid off, the money that was being paid to that specific debt will be distributed towards paying off remaining debts. If "No" is chosen, after a debt is paid off, the monthly payment for that particular debt will not be distributed towards paying off the remaining debts.
What is a Debt Payoff Calculator?
A debt payoff calculator is a financial tool that helps you plan how to most effectively pay off multiple debts. It uses the debt avalanche method (ordering by highest interest rate first) to determine the most cost-efficient repayment sequence.
The Debt Avalanche Method
The debt avalanche method is a repayment strategy where you prioritize paying off debts with the highest interest rates first, while making minimum payments on all other debts. Once the highest-interest debt is paid off, you roll that payment into the next highest-interest debt, and so on.
The interest savings from the debt avalanche method can be calculated using the formula:
$$\text{总利息} = \sum_{i=1}^{n} (\text{月付款额} \times \text{还款月数}_i - \text{债务金额}_i)$$
How to Use This Calculator
- Enter the name, balance, minimum monthly payment, and interest rate for each of your debts
- Add any extra amounts you can pay (monthly, yearly, or one-time payments)
- Choose how you want to handle payments after a debt is paid off
- Click the "Calculate" button to see your repayment plan and interest savings
Benefits of the Debt Avalanche Method
- Minimizes the total interest paid
- Provides a clear repayment strategy and end date
- Helps you become debt-free faster
Other Considerations
While the debt avalanche method is mathematically most efficient, some people may prefer the debt snowball method (paying smallest balances first) for psychological wins. Choose what works for you - the most important thing is to stick with it.
Frequently Asked Questions
What's the difference between the debt avalanche and debt snowball methods?
The debt avalanche method prioritizes debts with the highest interest rates, while the debt snowball method prioritizes debts with the smallest balances. The avalanche method saves more money mathematically, but the snowball method may provide earlier psychological wins.
How do extra payments affect my debt payoff plan?
Extra payments can significantly shorten your payoff time and reduce the total interest paid. Even an extra $100 per month can make a substantial difference.
What if my income or debt situation changes?
Update the calculator with your new data whenever your situation changes. It's wise to remain flexible and adjust your repayment plan as needed.