Debt Repayment Calculator

What does this debt repayment calculator reveal?

This debt repayment calculator is an at-a-glance look at how long you’ll be in debt given your current interest rate and the amount of your monthly payment. It can also tell you how high your monthly payments have to be in order to pay off your debt within a certain time period.

How to use this online debt repayment calculator

  1. Enter the amount of debt you owe in the field called “Balance.”
  2. Enter the current interest rate you are paying on your outstanding debt in the “Interest Rate” field.
  3. In the “Monthly Payment” field, enter the amount of money you contribute each month in payments to find out how long you’ll stay in debt under the current terms of your debt reduction strategy.
  4. Conversely, you may leave the Monthly Payment field blank and instead fill in the “Payoff Timeframe” field with the number of months you’d like to have your balance paid off by. The calculator will then give you the amount that your monthly payment needs to be, including interest, to meet this goal.

Underneath the calculator, you will see a “Find your best terms” button. This will lead you to LendingTree’s credit card marketplace. (MagnifyMoney is a subsidiary of LendingTree.)

Here you’ll be able to explore and compare offers for credit cards, read independent ratings and reviews and start the online application process (Subject to credit approval). A credit card may allow you to consolidate your debt at a lower APR while working on improving your credit score and history.

Debt repayment strategy

Some debt repayment strategies that may help you pay off debt sooner include the debt snowball and avalanche methods:

  • With the debt snowball method, you make minimum payments on all your debts except the one with the smallest balance. Once your smallest debt is repaid, you’ll take the money you paid toward it each month plus anything leftover and put toward the next-smallest debt. The idea behind paying off your smallest debt first is to keep you motivated as you see can gain momentum and see results faster.
  • With the debt avalanche strategy, you make extra payments on your debt with the highest interest rate. You’ll continue to make monthly minimum payments on your other debts. The avalanche method minimizes the amount you pay in interest charges.

You can compare these two repayment strategies with this debt snowball vs. avalanche calculator.

Balance transfer credit card

Transferring your credit card debt to a new credit card with a 0% introductory APR could help you pay off your debt for less. With these types of offers, you’ll generally have up to 21 months to repay your balance. With payments going entirely toward your principal, a balance transfer can help you gain traction toward your goal of debt freedom.

However, keep these things in mind before applying for this type of credit card offer:

  • You’ll need to repay your debt in full before the introductory period ends. If you don’t, you’ll be hit with all of the interest that’s accrued on your balance to that point.
  • You’ll need a credit score of around 700 or higher to qualify for such offers.
  • A balance transfer fee may apply, which will add to your debt.
  • Other restrictions may apply, such as a limit on how much you can transfer to the new credit card.

Debt consolidation loan

If you are looking to consolidate high-interest debt, one viable option could be taking out a debt consolidation loan, also known as a personal loan. This type of loan is used to combine multiple debts into one monthly payment with a fixed interest rate. Ideally, the interest rate will be lower than the debts you consolidate.

One major benefit of a debt consolidation loan is the ability to choose your repayment timeline. If you need more time to pay off a credit card, for example, you may choose a loan term of 12 months or longer. On the flipside, you could choose a shorter repayment term to repay your outstanding debts sooner to minimize accruing interest.

Debt consolidation loans are unsecured, meaning you don’t need collateral to qualify. Your credit is heavily weighed by lenders to determine your loan eligibility; that means only borrowers with good or excellent credit may find this to be a viable option. If you have poor credit, you may only qualify for high-rate debt consolidation loans that may not reduce your cost of repayment.

You may also have to pay an origination fee, though some lenders don’t charge this fee.

Debt management plan

You may want to consider enrolling in a debt management program through a nonprofit credit counseling agency. This involves making a monthly payment to the agency, which will then be used to make debt payments. The agency will also negotiate on your behalf for lower interest rates and fees, so you can pay off your principal amount for less.

Credit counseling agencies also provide financial education and will work with you to work out a realistic financial plan.

To qualify, you must be generating income and your debts should be unsecured without any collateral backing them up. You should also expect to pay a monthly enrollment fee of between $25 to $35.

FAQ: Debt repayment

Depending on the debt reduction strategy you choose to employ, you may choose to prioritize your debt with the highest interest rate, in order to reduce interest charges. However, targeting your smallest balances first may help you stay motivated as you work toward debt freedom.

Focusing your efforts on repaying secured debt first, such as an auto loan, is also worthwhile. That’s because with a secured loan, you risk losing your collateral (such as your car) if you fall behind on payments.

Regardless of which debt you choose to pay off first, you should always make sure you’re making at least the minimum payment on other debts on time.

With both a balance transfer and a debt consolidation loan, you can combine multiple high-interest balances together. This can make your monthly payments more manageable and increase how much money goes toward your principal balance (assuming you landed a lower interest rate).

However, a balance transfer credit card is specifically used to refinance or consolidate credit card debt. If you opt for a card with an introductory APR, you’ll have a strict period of time to repay your debt before deferred interest kicks in. A debt consolidation loan can give you more time to repay your debt and you can combine multiple types of debt together, but interest rates can be high depending on your credit profile.

Regardless of how dire your personal circumstances might be, a debt management plan can provide you with the necessary financial education and resources to come up with a realistic budget and a plan to meet your financial goals. You must be making enough income to make minimum payments on your debts and be able to pay the monthly fee for enrolling in the program.

For borrowers who need extra help juggling their finances and getting or staying current on debts, the monthly fee for this type of program may be worthwhile.

While it’s important to keep your spending in check when trying to get out of debt, closing your credit cards altogether could negatively impact your credit score. To get the best possible offers for personal loans and other financial products you can use to pay off your debt, you should focus on improving your credit score. You can do this by balancing your credit utilization ratio, keeping your credit accounts open for as long as possible and keeping a diverse mix of credit products.

Do you have a question?