Debt Payoff Calculator

This calculator builds two monthly payoff schedules from the same balance, nominal annual rate, and current payment. The baseline uses the current payment alone. The accelerated schedule adds the extra amount to every payment and assumes the extra reaches principal in that month. For each schedule, monthly interest is opening balance × annual rate ÷ 1,200, rounded to cents. The remainder of the payment reduces principal, and the final payment is trimmed to the balance actually owed. The schedule stops at zero. The comparison reports total interest in each schedule, interest saved, payments removed, and accelerated payoff time. Extra payments work because they lower the balance on which later interest is charged. The result is not simply extra payment × months saved: later skipped payments would contain less interest, while earlier principal reductions avoid interest across more future periods. The arithmetic follows the ordinary amortization relationship described in Regulation Z Appendix J and the CFPB explanation that a payment generally covers interest before reducing principal. The model assumes one fixed rate, one regular monthly payment, no new charges, and immediate principal application. A lender may calculate daily interest, change a variable rate, recalculate a minimum payment, charge a fee, or apply an extra amount as a payment advance instead of principal. Confirm the creditor’s instructions and compare the next statement. A payment that does not exceed first-month interest does not reduce the modeled balance and may produce a balloon or no normal payoff. Choosing where to send extra cash is a separate decision. The avalanche method targets the highest-rate debt first and usually minimizes modeled interest when payments and rates are otherwise comparable. The snowball method targets the smallest balance first and can create an earlier psychological milestone. Preserve minimum payments, an emergency reserve, insurance, and any employer retirement match before committing to an aggressive extra amount. This calculator does not rank your debts or include tax effects. Use the personal loan calculator for a new fixed loan, the mortgage payoff calculator for a mortgage-specific schedule, and the credit card payoff calculator when revolving-card terms and no-new-purchase assumptions are the relevant question. Enter the balance and rate from the same statement, save the result URL, and rerun it after a rate reset, fee, transfer, missed payment, or new charge. A written payoff plan should also preserve minimum payments and a cash reserve; mathematical interest savings are not a reason to create new high-cost debt elsewhere. Review the actual principal balance after the first extra payment and keep confirmation numbers for large payments so a posting problem is not mistaken for a formula problem. Check whether the lender applies extra money immediately to principal and whether it requires a written instruction. Some servicers advance the next due date instead, which changes the benefit from the model. Compare the schedule with a payoff quote when closing an account. The displayed savings are conditional on making the added payment every month and receiving the expected interest rate. A smaller emergency reserve or missed payment can cost more than the modeled interest reduction, so pair the payoff schedule with a cash-flow plan.