How long will it take to clear this debt?
Time to payoff, total interest, and what paying more than the minimum takes off both.
Check your statement. Cards and lines of credit differ a great deal.
What you are required to pay, for comparison.
Paid off in
3 years
costing $2,314 in interest along the way.
- Time to clear
- 3 years
- Total interest
- $2,314
- Total paid
- $14,314
- Interest saved
- $2,343
| At the minimum | 5 years, 9 months |
|---|---|
| Interest at the minimum | $4,657 |
| At your planned payment | 3 years |
| Interest at your payment | $2,314 |
| Saved | $2,343 |
The first month of this debt costs $119.00 in interest. Everything you pay above that comes off the balance, and every dollar off the balance removes all the interest it would have attracted from here on.
How this works
Interest is charged on the balance each month, and your payment covers that first. Whatever is left over comes off the balance, so next month's interest is charged on less. That is the whole mechanism, and it is why the balance falls slowly at first and then quickly.
The schedule is walked month by month rather than solved from a formula, which is what lets the interest total be exact rather than approximated.
The payment that never works
If your payment is at or below the monthly interest, the debt never clears. Not slowly, not eventually: the balance stays where it is or grows. This calculator says so plainly rather than returning a very large number of months, because a reader shown "412 months" will take it for an estimate.
Why paying extra does more than it looks
An extra dollar today does not just clear a dollar of debt. It removes every future interest charge that dollar would have attracted between now and the payoff date. At consumer rates, over a few years, that multiplies into far more than the extra payments themselves.
No judgement here
Debt is ordinary. Most households carry some, and carrying it is not a moral failing that a calculator should have opinions about. This page shows what a balance costs and what changes that, and nothing else.
What this assumes
- Monthly compounding
- The consumer credit convention, and not the semi-annual one Canadian mortgages use. Check your agreement if you are unsure: some lines of credit compound daily, which costs slightly more.
- The rate holds
- A variable rate moves with the prime rate. A promotional rate ends, often at a much higher one.
- Nothing more is borrowed
- Every payment goes against the existing balance. Continuing to spend on the same card changes the answer entirely.