Enter your debt details to see how long until you are debt-free
Each month, a portion of your payment goes toward interest and the rest reduces your principal. The interest portion is calculated as: Monthly interest = Balance × (Annual rate ÷ 12). Early in the payoff, most of your payment goes to interest. As the balance decreases, more goes to principal, which is why the payoff accelerates over time.
Extra payments go entirely toward principal, which reduces the balance faster and means less interest accrues. Even small additional payments can significantly reduce both the total interest paid and the payoff timeline. On a $10,000 credit card balance at 20% APR with $250 minimum payments, adding just $50 extra per month cuts the payoff time from 67 months to 47 months and saves $2,400 in interest.
| Method | How it works | Best for |
|---|---|---|
| Avalanche | Pay minimums on all, extra to highest-rate debt | Saving the most money on interest |
| Snowball | Pay minimums on all, extra to smallest balance | Building motivation through quick wins |
| Consolidation | Combine debts into one lower-rate loan | Simplifying payments, lowering rate |
Credit card companies set minimum payments low — often 1–2% of the balance or $25, whichever is higher. Paying only the minimum on a $5,000 balance at 22% APR would take over 23 years and cost more than $8,000 in interest — you would pay more in interest than the original balance. Always pay more than the minimum when possible.
It depends on your balance, interest rate, and monthly payment. Use the calculator above to get your specific timeline. As a rule of thumb, doubling your minimum payment typically cuts payoff time by more than half.
The avalanche method saves the most money by targeting the highest interest rate first. The snowball method provides psychological wins by eliminating the smallest balance first. Both work — the best method is the one you will stick with consistently.
If your debt interest rate exceeds expected investment returns (typically 6–8% for a diversified portfolio), paying off debt gives a guaranteed return equal to that rate. High-interest debt (credit cards at 15–25%) should almost always be prioritised over investing. Low-interest debt (mortgage at 3–4%) may be worth keeping while investing elsewhere.
Yes. Paying off debt reduces your credit utilisation ratio, which is the second most important factor in your credit score. Keeping utilisation below 30% — and ideally below 10% — has the largest positive impact on your score.
Contact your creditor immediately — many offer hardship programmes with reduced payments, lower interest rates, or temporary forbearance. Nonprofit credit counselling agencies can negotiate on your behalf. Ignoring payments leads to late fees, increased rates, and credit damage.