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Credit Card Payoff Calculator

Calculate months to debt freedom and total interest paid based on fixed monthly payments. Includes dynamic amortization schedule.

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Category Loans & Credits
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About

High-interest consumer debt compounds daily or monthly, creating a geometric progression of liability that often outpaces minimum payments. This calculator determines the precise duration required to clear a balance based on a fixed monthly contribution. Unlike standard estimators, this tool isolates the Total Interest component, exposing the true cost of borrowing over time. Accuracy here is critical; underestimating the required payment by even a small margin can result in a debt spiral where interest accrual exceeds the principal reduction (negative amortization). Users utilize this data to restructure personal cash flow and prioritize high-APR liabilities.

debt management interest calculator apr finance planning

Formulas

The number of months (n) required to payoff a debt is derived from the rearrangement of the annuity formula:

n = −ln(1 − B × rP)ln(1 + r)

Where B is the current balance, P is the fixed monthly payment, and r is the monthly interest rate (Annual Rate ÷ 12).

Reference Data

APR RangeCredit Rating TierAvg. Interest RateDaily Rate (r/365)
0.00% - 9.99%Super Prime7.50%0.0205%
10.00% - 15.99%Prime13.25%0.0363%
16.00% - 20.99%Near Prime18.50%0.0507%
21.00% - 26.99%Subprime24.99%0.0685%
27.00% - 35.99%Deep Subprime29.99%0.0822%
36.00% +Predatory/Penalty36.00%0.0986%
0.00% (Promo)Balance Transfer0.00%0.0000%
VariableIndex + MarginPrime + 12.4%Variable

Frequently Asked Questions

This mathematical error occurs when your entered Monthly Payment is less than or equal to the interest accruing on the balance. If $P le B times r$, the principal never decreases, and the debt grows infinitely.
The tool assumes monthly compounding, which is standard for most credit card agreements (APR / 12). Some issuers use Average Daily Balance methods, which may result in a slightly higher effective rate ($r_{eff} = (1 + r/365)^{30} - 1$).
The table reveals the "tipping point" where the majority of your payment shifts from covering interest to reducing principal. In high-interest scenarios, early payments are almost entirely interest, which discourages borrowers who do not visualize the long-term curve.
A lump sum payment directly reduces the Principal ($B$). Since interest is calculated on $B$, a lower balance immediately reduces the interest portion of all future payments, shortening the term ($n$) exponentially.