Debt Payoff Calculator

The whole thing is a month-by-month simulation rather than a formula. Each month, every live balance grows by its own interest, then every minimum payment is made, then whatever money is left attacks one debt. Minimums are always paid. The only question this tab asks is where the money above the minimums should go, which is the question people face.

The monthly budget is every minimum you’ve entered plus whatever extra you add, and it never shrinks. When a debt is cleared, its minimum stays in the pool and rolls onto the next target, so the second debt dies faster than the first, and the last one goes quickest of all. That rollover is most of why paying extra works as well as it does.

Avalanche attacks the highest-interest rate first and is mathematically optimal. It always settles the debt for less money. Snowball clears the smallest balance first, costs more, and finishes individual debts sooner, which is worth something the arithmetic cannot see. Both are shown so you can decide what the difference is worth to you. In many realistic scenarios, the two clear in the same month and differ only in the interest paid, and the calculator reflects that rather than manufacturing a winner.

One result is worth more attention than the rest. If a debt’s minimum payment doesn’t cover that debt’s own monthly interest, the balance grows no matter how long you pay it, and the tab flags that debt by name. At 19.9%, a $3,000 balance generates about $50 a month in interest on its own.

The invest-instead view compares paying down debt to putting the same money into the market. Paying off an 8% loan is a guaranteed 8% return; investing is a hoped-for return with real chances of being negative for years. The comparison treats the two as if they carried the same certainty. They do not, and that difference should weigh in favour of clearing the debt.

The minimum payment you enter stays fixed for the whole run, while a real card recalculates it as a percentage of a falling balance, which stretches a minimum-only payoff out much further than this shows. Rates are held constant, so promotional rates that expire and variable rates that move are not modelled. Nothing here accounts for late fees, penalty rates, balance transfers, consolidation, or what any of it does to a credit score. The fourth debt and any after it start at $3,000 at 19.9% with a $90 minimum, which is a placeholder for a typical card rate rather than a researched figure and is meant to be replaced with yours.