Debt Payoff Calculator

Why Extra Payments Matter

With high-interest debt, a large portion of your minimum payment goes to interest. Extra payments go directly to principal, reducing the balance that accrues interest. This creates a powerful snowball effect.

Debt Payoff Methods

• Avalanche: Pay highest interest rate first (saves most money)
• Snowball: Pay smallest balance first (psychological wins)
• Consolidation: Combine debts into one lower-rate loan
• Balance Transfer: Move to 0% APR card (watch for fees)

Finding Extra Money

• Cut unnecessary subscriptions
• Reduce dining out temporarily
• Sell items you no longer need
• Pick up a side gig
• Redirect tax refunds and bonuses

The True Cost of Minimum Payments

Credit card companies set minimum payments to maximize interest collected. A $5,000 balance at 18% APR with 2% minimum payment takes 30+ years to pay off and costs over $12,000 in interest!

Avoiding Future Debt

• Build an emergency fund first
• Use the 24-hour rule before purchases
• Pay credit cards in full each month
• Track spending to identify patterns
• Distinguish needs from wants

When to Seek Help

• Debt exceeds 50% of income
• Cannot make minimum payments
• Using debt to pay debt
• Considering bankruptcy
• Nonprofit credit counseling is free