Debt Payoff Calculator: Plan Your Path to Freedom

How long will it take to become debt-free? Use these calculations to plan your escape from debt.

The Basic Payoff Formula

To find months to payoff with minimum payments:

Months = -log(1 - (rate × balance) / payment) / log(1 + rate)

Don't worry—we'll break this down with real examples.

Quick Reference: Credit Card Payoff Times

At minimum payments (typically 2-3% of balance):

This is why minimum payments keep you trapped.

The Power of Extra Payments

Same $10,000 at 20%:

Doubling your payment cuts payoff time by more than half.

Debt Consolidation Impact

Before consolidation:

• $15,000 credit card at 22%: $330/month min → 9 years, $20,700 total interest

After HELOC consolidation at 8%:

• Same $330/month → 4.7 years, $3,340 total interest
• Savings: $17,360

Learn about HELOC debt consolidation →

Calculate Your Personal Payoff

Step 1: List All Debts

Step 2: Determine Extra Payment

Budget review reveals $400/month extra for debt payoff. Total available: $890 + $400 = $1,290/month

Step 3: Calculate Payoff by Strategy

Minimum Payments Only ($890/month):

• Total payoff: 8.5 years
• Total interest: $23,400

Extra $400/month (Avalanche - highest rate first):

• Total payoff: 3.8 years
• Total interest: $9,200
• Savings: $14,200

Extra $400/month (Snowball - smallest balance first):

• Total payoff: 4.0 years
• Total interest: $9,800
• Savings: $13,600

Visual: The Payoff Curve

Debt doesn't decrease linearly. Early payments mostly go to interest.

Year 1: Principal barely moves (discouraging) Year 2-3: Momentum builds Final Year: Big chunks come off each month

This is why consistency matters more than strategy.

Accelerated Payoff Strategies

1. The Debt Avalanche

Pay minimums on all, extra toward highest rate.

• Pros: Mathematically optimal, saves most money
• Cons: Slower visible progress early

2. The Debt Snowball

Pay minimums on all, extra toward smallest balance.

• Pros: Quick wins, psychological momentum
• Cons: Costs more in interest

3. The Hybrid

Start snowball (2-3 quick wins), then switch to avalanche.

• Pros: Early momentum + long-term savings

4. Debt Consolidation

Replace multiple debts with one lower-rate loan.

• Pros: Lower rate, one payment, faster payoff
• Cons: Requires discipline, some upfront costs

Compare methods: Snowball vs Avalanche →

The Extra Payment Calculator

Extra monthly payment: $X Applied to: $Y balance at Z% rate

Impact formula (simplified):

• Each $100 extra saves roughly $100-200 in interest (varies by rate)
• Each $100 extra shortens payoff by 1-3 months

Example: $100 extra on $10,000 at 20%:

• Saves ~$1,400 in interest
• Shortens payoff by 2 years

What If Scenarios

"What if I throw my tax refund at debt?"

$3,000 lump sum on $10,000 at 20%:

• Reduces payoff by 2+ years
• Saves $3,500+ in interest

"What if rates drop?"

If HELOC rate drops 1% on $30,000:

• Saves $300/year in interest
• Accelerates payoff if payment stays same

"What if I consolidate today?"

$20,000 from 22% cards to 8% HELOC:

• Saves $2,800/year in interest
• Same payment pays off 4 years faster

Create Your Payoff Plan

1. List debts with balances, rates, minimums
2. Find extra money in budget ($100-500 typical)
3. Choose strategy (avalanche saves most, snowball motivates)
4. Set milestone dates for each debt payoff
5. Automate payments to stay consistent
6. Review quarterly and adjust

When to Consider Consolidation

Consolidation makes sense when:

• Total rate drops significantly (5%+ difference)
• Monthly payment becomes more manageable
• You have home equity to leverage
• You won't run up new debt on paid cards

Warning signs to consolidate now:

• Multiple credit cards over 20%
• Barely making minimum payments
• No end in sight at current pace

The Bottom Line

Every extra dollar toward debt accelerates your freedom. Run your numbers, pick a strategy, and start today.

Ready to Accelerate Your Payoff?

A HELOC could cut your interest rate in half and slash years off your debt payoff timeline.

Explore debt consolidation options or check your pre-qualification status.