Our Debt Payoff Calculator helps estimate the time required to pay off debts and suggests the most cost-efficient payoff sequence, incorporating the option to make extra payments. It utilizes the debt avalanche method, recognized for its financial efficiency in minimizing overall interest costs.
Debt – Money that is owed or due. Balance Owed – The remaining amount of your debt that you need to pay. Annual Interest Rate (APR) – Also known as the annual percentage rate, it is the interest rate applied to your credit card purchases that were not paid in full each month. Payoff Date – The date you set for completely paying off your debts. Monthly Payment Needed – The amount of money you need to allocate to pay off your debts based on your goal date. Interest – The amount paid for borrowing money. Principal – The original amount of money borrowed, not including interest. Be aware that when interest compounds, interest is then added to that principal increasing the balance owed.
Paying off debts early requires financial discipline and proactive steps, including budget creation, expense reduction, selling unused items, and lifestyle adjustments. To effectively tackle debts, borrowers can employ different strategies:
Selecting the most suitable strategy depends on individual financial situations and preferences, with each approach offering distinct advantages.