Loan Payoff Calculator
Enter your loan and a monthly payment to find your debt-free date — then add an extra payment to see how much sooner you finish and how much interest you skip.
Your numbers
Extra money goes straight to principal, which is what shrinks your interest.
Your result
Assumes a fixed APR and on-time payments every month. Some loans have prepayment penalties — check yours before paying extra.
How loan payoff works
Each month, part of your payment covers interest on the remaining balance and the rest reduces the balance itself. Early in a loan, interest takes the biggest share — which is why extra payments early on are so effective: every extra dollar of principal is a dollar that never accrues interest again.
Monthly interest = balance × (APR ÷ 12). The calculator simulates this month by month until the balance reaches zero, once with your regular payment and once with the extra amount added, then compares the two.
When you make extra payments, tell your lender to apply them to principal, not to advance your next due date — otherwise you lose most of the benefit shown here.
Frequently asked questions
Is it better to pay extra monthly or make one lump-sum payment?
Mathematically, paying sooner always wins, so a lump sum today beats spreading the same total over the year. In practice, extra monthly payments win for most people because they're automatic and sustainable. Do whichever you'll actually stick to.
Should I pay off my loan early or invest the money instead?
Paying off a loan earns a guaranteed return equal to its interest rate, with zero risk. If your loan is at 8.5% and expected investment returns are around 7–10% with real ups and downs, the loan payoff is often the better deal — especially for high-APR debt. Keep an emergency fund first, though.
Why does the calculator say my payment is too low?
If your monthly payment is less than the interest accruing each month, the balance grows instead of shrinking and the loan can never be paid off. The payment must exceed balance × APR ÷ 12 to make progress.
Debt Payoff Calculator
List your debts and a total monthly budget. The calculator runs both payoff strategies month by month so you can compare the finish line — and the price tag.
Your debts
Your total monthly budget is all minimum payments plus this extra amount. When a debt is paid off, its payment rolls into the next one.
Your result
Avalanche — highest APR first
Pays the least interest. The mathematically optimal order.
Snowball — smallest balance first
Quick early wins as small debts disappear. Often easier to stick with.
Assumes fixed APRs, minimum payments stay the same, and no new charges are added to the debts.
Avalanche vs. snowball: which payoff order is better?
Both methods pay the minimum on every debt and throw all extra money at one target debt at a time. They differ only in which debt is the target. The avalanche method targets the highest interest rate first, which always minimizes total interest. The snowball method targets the smallest balance first, which clears whole debts sooner and gives quick wins that help many people stay motivated.
The calculator simulates each method month by month: interest accrues on every balance, minimums are paid, then the remaining budget attacks the target debt — with freed-up payments rolling into the next target as each debt hits zero.
When balances and rates are similar, the two methods cost nearly the same, and the best plan is simply the one you'll follow for the full payoff period. When the difference is thousands of dollars, the avalanche usually earns its keep.
Frequently asked questions
What if my minimum payments don't cover the interest?
Then that balance grows even while you pay — common with minimum payments set at 1–2% of the balance on high-APR cards. The calculator will warn you. The fix is to raise the total budget so every debt's payment exceeds its monthly interest (balance × APR ÷ 12).
Should I stop saving while I pay off debt?
Most financial planners suggest keeping a small starter emergency fund (often $1,000–$2,000, or one month of expenses) first, so one surprise bill doesn't push you back onto the cards. After that, high-APR debt usually takes priority over extra investing, since paying off a 25% APR card is a guaranteed 25% return.
Does this include mortgages or car loans?
You can add any fixed-payment debt, but this tool is designed for revolving and personal debts. Mortgages and auto loans have their own amortization schedules — see the Mortgage and Loan Payoff calculators for those.