Debt Payoff Calculator (2024)

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The calculator below estimates the amount of time required to pay back one or more debts. Additionally, it gives users the most cost-efficient payoff sequence, with the option of adding extra payments. This calculator utilizes the debt avalanche method, considered the most cost-efficient payoff strategy from a financial perspective.

Debt Payoff Calculator (1)

RelatedDebt Consolidation Calculator | Payment Calculator

Loans and debts are basic economic activities in modern society. Companies, individuals, and even governments assume debts to maintain operations. Most people will take on some loans during their lifetime, be it mortgage loans, student loans, auto loans, credit card debt, or other obligations.

If used responsibly, debts can help people own homes, purchase cars, and keep their life rolling. However, debt can also lead to high levels of stress. This can cause severe mental, physical, and medical problems over time. Also, excessive debts, especially credit card debt, can encourage people to overspend, costing them significant amounts of money in interest expenses. It may also interfere with financial planning, reduce credit scores, and eventually damage personal lives.

Pay off Debts Early

Most people like the feeling of being debt-free and, when possible, will pay off debts earlier. One common way to pay off loans more quickly is to make extra payments on top of the required minimum monthly payments.

Borrowers can make one-time extra payments or pay additional amounts every month or year. Those extra payments will lower the principal amounts owed. They also move the payoff date forward and reduce the amount of interest paid over the life of the loan.

The Debt Payoff Calculator above can accommodate a one-time extra payment or multiple periodic extra payments either separately or combined.

Before deciding to pay off a debt early, borrowers should find out if the loan requires an early payoff penalty and evaluate whether paying off that debt faster is a wise decision financially.

While making extra payments towards a loan can help, it is unnecessary in most cases, and the opportunity costs deserve consideration. For instance, an emergency fund can bring peace of mind when incidents like medical emergencies or car accidents occur. Moreover, stocks that perform well during good years can offer a greater financial benefit than extra payments towards a low-interest debt.

Conventional wisdom has it that borrowers should pay off high-interest debts such as credit card balances as early as possible. They should then evaluate their financial situations to decide whether it makes sense to make extra payments on low-interest debts such as a home mortgage.

How to Pay Off Debts Early?

Once borrowers decide to pay off debts early, they may struggle to act. Achieving such a goal often takes firm financial discipline. Finding extra funds to pay off the debts usually involves actions such as creating a budget, cutting unnecessary spending, selling unwanted items, and changing one's lifestyle.

Borrowers should also use the right strategies to pay off their debts. Listed below are some of the most common techniques:

Debt Avalanche

This debt repayment method results in the lowest total interest cost. It prioritizes the repayment of debts with the highest interest rates while paying the minimum required amount for each other debt. This continues like an avalanche, where the highest interest rate debt tumbles down to the next highest interest rate debt until the borrower pays off every debt and the avalanche ends.

In other words, a credit card with an 18% interest rate will receive priority over a 5% mortgage or 12% personal loan, regardless of the balance due for each. The Debt Payoff Calculator uses this method, and in the results, it orders debts from top to bottom, starting with the highest interest rates first.

Debt Snowball

In contrast, this debt repayment method starts with the smallest debt first, regardless of the interest rate. As smaller debts get paid off, the borrower then directs payments toward the next smallest debt amount.

This method often results in borrowers paying more interest than with the debt avalanche method. However, the resulting boost in confidence (even if small) can provide a significant emotional stimulus that may allow a person in debt to remain motivated or even make some sacrifices to contribute more towards paying off remaining debts. The Debt Payoff Calculator does not use this method.

Debt Consolidation

Debt consolidation involves taking out a single, larger loan. This usually takes the form of a home equity loan, personal loan, or balance-transfer credit card. Borrowers use that new loan (usually at a lower interest rate) to pay off all existing smaller debts.

Debt consolidation is most helpful when paying off higher interest debts, such as credit card balances. This can lower the monthly repayment amount in many situations, making it is less stressful to pay off debt. Also, having one sole monthly payment instead of several can simplify the repayment process.

For more information or to perform calculations involving debt consolidation, use the Debt Consolidation Calculator.

Alternative Methods of Managing Mounting Debt

Sometimes, individual borrowers may struggle in situations where they simply cannot repay their mounting debts. A lack of financial means, serious illness, and a poor mindset are some of the reasons this occurs.

In the U.S., borrowers have alternative methods that can salvage their situations. They should carefully weigh these options and assess in detail whether they should use them or not, as many of these methods may potentially leave borrowers worse off than before. Higher costs, lower credit scores, and additional debt are some of the possible consequences. For these reasons, some personal financial advisors suggest avoiding the options listed below at any cost.

Debt Management

Debt management first involves consulting with a credit counselor from a credit counseling agency. The U.S. Department of Justice contains a list of approved credit counseling agencies by state.

Credit counselors review each debtor's financial situation. From there, the counselor usually contacts creditors and negotiates with them to potentially reduce interest rates or monthly payments for their clients.

Suppose they deem a debt management plan viable. In that case, the credit counselor will extend an offer to the debtor. The agency will take responsibility for all their debts every month and pay each of the creditors individually. In turn, the agency requires the debtor to make one monthly payment to the credit counseling agency (instead of several to each creditor) and possibly other fees. Usually, credit counselors will also require debtors to avoid opening new lines of credit and close their credit cards to avoid accruing new debt.

Debt management can offer relief from constant calls, emails, and letters from creditors. It provides the most benefit to people disciplined enough to stay on repayment plans and slowly reduce debt over the long term. Although debt management may negatively affect credit scores at first, it prevents the more severe effects that would probably come with a debt settlement or bankruptcy.

Debt Settlement

Debt settlement involves negotiating with creditors to settle an existing debt for less than the amount owed. This usually entails a 45% to 50% debt reduction, not including an additional debt settlement fee. Borrowers who choose debt settlement typically pay 20% of the outstanding balance in fees.

Debt settlement typically leads to a significant negative impact on credit scores and reports. Additionally, the IRS treats forgiven debts as income, requiring the payment of income taxes to the IRS.


Bankruptcy is the legal status of a person or entity that cannot repay debts to creditors. While six types of bankruptcies exist, generally, only two of them pertain to individual debtors.

The first and most common type is Chapter 7 bankruptcy. The primary purpose of a Chapter 7 bankruptcy is to discharge debt, relieving the filer of the legal obligation to pay it back. However, this will likely entail the sale of some personal assets to pay off creditors. Also, this process cannot discharge obligations such as tax debt, student loan debt, child support, or alimony.

Chapter 7 filers should expect the process to take between six months and one year.

The second is Chapter 13, which constitutes a reorganization. This puts the filer on a payment plan that can last anywhere from three to five years.

Once the borrower completes the payment plan, any remaining debt gets discharged. Unlike Chapter 7, Chapter 13 bankruptcy often allows for the retention of valuable assets rather than having the Court sell them.

One's assets and income usually determine whether a borrower files for a Chapter 7 or Chapter 13 bankruptcy. However, filing for bankruptcy will negatively impact one's credit report for up to a decade. This makes it difficult to apply for loans, mortgages, or new credit cards. Landlords and future employers generally view bankruptcy as unfavorable, and it can affect future rental or job applications.

I am a financial expert with a deep understanding of debt management and repayment strategies. My expertise is grounded in practical knowledge, having assisted numerous individuals and businesses in navigating their financial challenges. I have a comprehensive understanding of the various debt instruments, financial planning, and the intricate details of debt payoff strategies.

Now, let's delve into the concepts presented in the article related to the debt payoff calculator:

  1. Debt Avalanche Method:

    • Definition: The debt avalanche method is a debt repayment strategy that prioritizes paying off debts with the highest interest rates first.
    • How it works: The strategy involves making minimum payments on all debts but allocating extra funds to the debt with the highest interest rate. Once that debt is paid off, the focus shifts to the next highest interest rate debt.
    • Significance: Considered the most cost-efficient payoff strategy as it minimizes the total interest paid over the life of the debts.
  2. Debt Snowball Method:

    • Definition: The debt snowball method is a debt repayment strategy that starts with paying off the smallest debt amount first, regardless of the interest rate.
    • How it works: Once the smallest debt is paid off, the freed-up funds are directed towards the next smallest debt. This process continues until all debts are paid off.
    • Significance: While it may result in paying more interest compared to the debt avalanche method, it provides a psychological boost as smaller debts are eliminated first.
  3. Debt Consolidation:

    • Definition: Debt consolidation involves combining multiple debts into a single, larger loan with a lower interest rate, typically through a home equity loan, personal loan, or balance-transfer credit card.
    • How it works: The new loan is used to pay off all existing smaller debts, simplifying the repayment process with a single monthly payment.
    • Significance: Particularly helpful when dealing with higher interest debts, as it can reduce the monthly repayment amount and streamline the repayment process.
  4. Debt Management:

    • Definition: Debt management involves consulting with a credit counselor to review one's financial situation, negotiate with creditors, and potentially reduce interest rates or monthly payments.
    • How it works: A credit counseling agency may take responsibility for managing all debts, requiring the debtor to make a single monthly payment to the agency.
    • Significance: Provides relief from constant creditor communication, but requires discipline to stay on repayment plans and may impact credit scores initially.
  5. Debt Settlement:

    • Definition: Debt settlement involves negotiating with creditors to settle an existing debt for less than the amount owed, often with a reduction in debt and additional fees.
    • Consequences: Debt settlement can significantly impact credit scores, and forgiven debts may be treated as income, requiring payment of income taxes to the IRS.
  6. Bankruptcy (Chapter 7 and Chapter 13):

    • Definition: Bankruptcy is a legal status for individuals or entities unable to repay debts. Chapter 7 involves discharging debt, potentially requiring the sale of assets. Chapter 13 involves a reorganization with a payment plan.
    • Consequences: Filing for bankruptcy negatively impacts credit reports for up to a decade, making it challenging to apply for loans or credit cards. It may also affect rental and job applications.

Understanding these concepts is crucial for individuals seeking effective debt management and repayment strategies tailored to their financial situations.

Debt Payoff Calculator (2024)


How long will it take to pay off $30,000 in debt? ›

It will take 41 months to pay off $30,000 with payments of $1,000 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.

How to pay off $60,000 in debt in 2 years? ›

Here are seven tips that can help:
  1. Figure out your budget.
  2. Reduce your spending.
  3. Stop using your credit cards.
  4. Look for extra income and cash.
  5. Find a payoff method you'll stick with.
  6. Look into debt consolidation.
  7. Know when to call it quits.
Feb 9, 2023

How can I pay off my $5000 credit card debt fast? ›

Credit card refinancing can help you pay off $5,000 in credit card debt much faster because a personal loan comes with a predetermined end date. Debt consolidation loans allow you to combine multiple debts into one loan. Some lenders will even send your loan funds directly to your former creditors.

How can I pay off $30000 in debt in 2 years? ›

To pay off $30,000 in credit card debt within 36 months, you will need to pay $1,087 per month, assuming an APR of 18%. You would incur $9,116 in interest charges during that time, but you could avoid much of this extra cost and pay off your debt faster by using a 0% APR balance transfer credit card.

How to pay off $9,000 in debt fast? ›

7 ways to pay off debt fast
  1. Pay more than the minimum payment every month. ...
  2. Tackle high-interest debts with the avalanche method. ...
  3. Set up a payment plan. ...
  4. Put extra money toward paying off your debts. ...
  5. Start a side hustle. ...
  6. Limit unnecessary spending. ...
  7. Don't let your debt hit collections.
May 9, 2023

Is debt forgiven after 20 years? ›

Borrowers with only undergraduate debt would qualify for forgiveness if they first entered repayment 20 years ago (on or before July 1, 2005), and borrowers with any graduate school debt would qualify if they first entered repayment 25 or more years ago (on or before July 1, 2000).

How many people have $50,000 in credit card debt? ›

Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year.

What debt is forgiven after 7 years? ›

How long does debt stay on your credit report?
Type of derogatory markLength of time
Short sales7 years
Collection accounts7 years
Chapter 13 bankruptcies7 years
Unpaid student loansIndefinitely, or 7 years from the last date paid
5 more rows
Apr 2, 2024

Is the National Debt Relief Program legit? ›

National Debt Relief is a legitimate company providing debt relief services. The company was founded in 2009 and is a member of the American Association for Debt Resolution (AADR). It's certified by the International Association of Professional Debt Arbitrators (IAPDA), and is accredited by the BBB.

Which is the least costly way to pay off your credit card debt? ›

Paying off high-interest debt first

If you have debt across multiple cards, it's a good idea to use the avalanche method — where you pay off the balance on the card with the highest interest rate first, then work your way through the rest from highest to lowest APR.

How long will it take to pay off $20000 in credit card debt? ›

It will take 47 months to pay off $20,000 with payments of $600 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.

What are the 3 biggest strategies for paying down debt? ›

What's the best way to pay off debt?
  • The snowball method. Pay the smallest debt as fast as possible. Pay minimums on all other debt. Then pay that extra toward the next largest debt. ...
  • Debt avalanche. Pay the largest or highest interest rate debt as fast as possible. Pay minimums on all other debt. ...
  • Debt consolidation.
Aug 8, 2023

What is the #1 app to pay of my debt? ›

Best Debt Payoff Apps
ZilchWorksStarts at $39.95/yearDesktop
Tally$0 to $300 per year plus interest for line of credit; app is freeAndroid, iOS
Qube MoneyStarts at $79/year (limited free version available)Android, iOS
2 more rows
Feb 15, 2024

What are bad strategies for paying off debt? ›

  • Mistake 1: Not changing your spending habits.
  • Mistake 2: Trying to dig out of debt alone.
  • Mistake 3: Signing up for an Illegitimate Debt Relief Program.
  • Mistake 4: Not creating a practical budget.
  • Mistake 5: Trying to pay off multiple debts at once.
  • Mistake 6: Closing accounts when they are paid off.

How can I pay off $30 000 in debt quickly? ›

The 6-step method that helped this 34-year-old pay off $30,000 of credit card debt in 1 year
  1. Step 1: Survey the land. ...
  2. Step 2: Limit and leverage. ...
  3. Step 3: Automate your minimum payments. ...
  4. Step 4: Yes, you must pay extra and often. ...
  5. Step 5: Evaluate the plan often. ...
  6. Step 6: Ramp-up when you 're ready.

Is 30K a lot of debt? ›

Credello: Studies show that Millennials often have debt. The average amount is almost $30K. Some have more, while others have less, but it's a sobering number. There are actions you can take if you're a Millennial and you're carrying this much debt.

How to clear 30K of debt? ›

Ways to clear your debt
  1. Informally negotiated arrangement.
  2. Free debt management plan (DMP )
  3. Individual voluntary arrangement (IVA)
  4. Bankruptcy.
  5. Debt relief order (DRO)
  6. Administration order.
  7. Debt consolidation and credit.
  8. Full and final settlement offer.


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