Debt Payoff Planner
Create a plan to become debt-free faster
Last updated: January 2025
About This Tool
A debt payoff planner helps you create a strategic plan to eliminate debt faster. By comparing different payoff methods and showing the impact of extra payments, this tool empowers you to become debt-free while saving money on interest.
What is Debt Payoff Planner?
A debt payoff planner is a financial tool that analyzes your debts and creates an optimized repayment strategy. It calculates payoff timelines, total interest costs, and helps you choose between different methods like the debt avalanche (highest interest first) or debt snowball (smallest balance first).
How It Works
Enter all your debts with their balances, interest rates, and minimum payments. Choose a payoff strategy and any extra payment amount. The calculator simulates month-by-month payments, showing when each debt will be paid off and how much interest you will save compared to paying only minimums.
Formula
Total Interest = Sum of (Monthly Balance × Monthly Rate) over payoff period
Payoff Strategy
Your Debts
Total monthly: $700
Debt-Free In
3 yr 1 mo
Total interest: $2,518.19
💰 Your Savings
Time Saved
1y 1mo
Interest Saved
$1,953.39
Payoff Order
Credit Card
$5,000 @ 19.99%
Car Loan
$15,000 @ 6.5%
Summary
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When to Use This Calculator
- 1Creating a comprehensive debt elimination strategy
- 2Deciding between avalanche and snowball payoff methods
- 3Determining how extra payments accelerate debt freedom
- 4Comparing the cost of different debt scenarios
- 5Staying motivated by visualizing your debt-free date
Pro Tips
- •Always pay at least the minimum on all debts to avoid penalties
- •Direct extra payments to one debt at a time for maximum impact
- •Consider balance transfer cards for high-interest credit card debt
- •Celebrate paying off each debt to maintain motivation
- •Once debt-free, redirect former payments to savings and investments
Common Mistakes to Avoid
- •Spreading extra payments across all debts instead of focusing on one
- •Choosing snowball when avalanche would save significantly more money
- •Accumulating new debt while paying off existing debt
- •Not having an emergency fund, leading to new debt for unexpected expenses
- •Closing credit cards immediately after payoff (can hurt credit score)