Debt Payoff Calculator
Calculate the most cost-efficient strategy to pay off multiple debts
Debt Payoff Calculator
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 Information
📊 Payoff Results
You can pay off your debts in 136 months (11 years and 4 months) by making fixed payments of $2,629.00 every month, of which, $100.00 is the extra monthly payment. You will need to pay a total of $356,852.87, of which the total interest is $72,852.91.
📋 Payment Schedule (Debt Avalanche)
The most financially feasible method to pay off debts is to start by paying off the highest interest debts first while paying the monthly or minimum payments for the other debts. The following is the payment schedule.
| Debt | Payoff length | Total interest | Total payments | Payment schedule |
|---|---|---|---|---|
| #3: Credit card 1 | 31 months (2 years and 7 months) | $1,606.87 | $7,606.85 | Pay $250.00 until month 30. Pay $106.85 at month 31 to payoff. |
| #4: Credit card 2 | 39 months (3 years and 3 months) | $1,317.04 | $4,317.02 | Pay $60.00 until month 30. Then pay $203.15 until month 31. Then pay $310.00 until month 38. Pay $143.87 at month 39 to payoff. |
| #1: Auto loan | 48 months (4 years) | $2,801.51 | $27,801.51 | Pay $519.00 until month 38. Then pay $685.13 until month 39. Then pay $829.00 until month 47. Pay $762.38 at month 48 to payoff. |
| #2: Home mortgage | 136 months (11 years and 4 months) | $67,127.50 | $317,127.49 | Pay $1,800.00 until month 47. Then pay $1,866.62 until month 48. Then pay $2,629.00 until month 135. Pay $1,937.87 at month 136 to payoff. |
📚 Understanding Debt Payoff Strategies
Debt Avalanche Method
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.
Extra Payments Impact
Making extra payments towards your debts can significantly reduce the total interest paid and shorten the payoff time. Even small additional payments can make a big difference over time.
High-Interest Debt Priority
Focus on paying off high-interest debts like credit cards first, as they cost the most over time. Continue making minimum payments on other debts while directing extra funds to the highest rate debt.
Debt Payoff Strategies
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.
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 can provide significant emotional stimulus.
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.