Debt Payoff Calculator

Create a strategic plan to eliminate debt faster and save thousands in interest using proven financial strategies.

Strategic Debt Elimination Guide

Step 1: Complete Debt Inventory

Gather All Debt Information: Credit cards, personal loans, student loans, car loans, and any money owed to family/friends.

For Each Debt Record: Current balance, minimum payment, interest rate (APR), and payment due date.

Don't Include: Mortgage (unless you want to pay it off early) or business debt (separate strategy needed).

Reality Check: This step often reveals people owe 20-30% more than they thought. Don't let this discourage you—knowledge is power.

Step 2: Choose Your Strategy

Debt Snowball Method (Recommended for Beginners)

Pay minimums on all debts, put extra money toward the smallest balance first.

Best for: People who need motivation and quick wins

Debt Avalanche Method (Mathematically Optimal)

Pay minimums on all debts, put extra money toward the highest interest rate first.

Best for: People motivated by saving money on interest

Financial Advisor Insight: Snowball has an 80% success rate vs. 60% for avalanche. Motivation matters more than math for most people.

Step 3: Find Extra Money for Debt Payments

Quick Wins (This Month):

Cancel unused subscriptions ($50-200/month)
Reduce dining out by 50% ($100-300/month)
Sell items you don't need ($200-1,000 one-time)

Medium-Term Strategies (Next 3 Months):

Take on freelance work or side gig
Use tax refund or bonuses entirely for debt
Negotiate lower rates on insurance/phone/internet

Pro Strategy: Even an extra $100/month can cut years off your debt payoff and save thousands in interest.

Step 4: Prevent New Debt

Emergency Buffer: Build a $1,000 mini emergency fund first, then focus on debt.

Remove Temptation: Take credit cards out of your wallet, delete stored payment info from shopping sites.

Use Cash/Debit Only: For variable expenses like groceries and entertainment.

Critical Truth: Adding new debt while paying off old debt is like trying to fill a bucket with holes in it.

Advanced Strategies for Faster Payoff

Balance Transfer: Move high-interest debt to 0% APR card (if you qualify and won't add new debt)

Debt Consolidation Loan: Combine multiple debts into one lower-rate payment

Call and Negotiate: Ask creditors for lower rates - success rate is about 30%

Bi-weekly Payments: Split monthly payment in half, pay every 2 weeks (26 payments vs 24)

Avoid These Debt Payoff Mistakes

• Paying only minimums forever (a $5,000 credit card at 18% APR takes 47 years to pay off with minimums only)
• Using retirement funds to pay debt (penalties + taxes often cost more than the debt interest)
• Taking on new debt while paying off old debt
• Ignoring the debt and hoping it goes away
• Not celebrating milestones - acknowledge progress to stay motivated

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Learn more: Read our comprehensive guide on

Debt Snowball vs Avalanche: Which Method Should You Use?

Learn the two most popular debt payoff strategies, compare their pros and cons, and choose the right method for your situation.

Frequently Asked Questions

DEBT AVALANCHE = Pay highest interest rate first (mathematically optimal)
DEBT SNOWBALL = Pay smallest balance first (psychologically motivating)

EXAMPLE - $50,000 total debt:

Debt list:
• Credit Card A: $8,000 @ 22% APR
• Credit Card B: $2,000 @ 19% APR
• Personal Loan: $15,000 @ 12% APR
• Student Loan: $20,000 @ 5% APR
• Car Loan: $5,000 @ 7% APR

AVALANCHE ORDER (highest rate first):
1. Credit Card A (22%)
2. Credit Card B (19%)
3. Personal Loan (12%)
4. Car Loan (7%)
5. Student Loan (5%)

SNOWBALL ORDER (smallest balance first):
1. Credit Card B ($2,000)
2. Car Loan ($5,000)
3. Credit Card A ($8,000)
4. Personal Loan ($15,000)
5. Student Loan ($20,000)

THE RESULTS ($2,000/month payment):

Avalanche Method:
• Time to debt-free: 28 months
• Total interest paid: $5,847
• Savings: $847

Snowball Method:
• Time to debt-free: 29 months
• Total interest paid: $6,694
• Quick wins: 2 debts gone in 4 months

OUR RECOMMENDATION: Modified Avalanche
• Pay off one small debt first (quick win)
• Then switch to avalanche (highest interest)