How to Calculate How Long Till I Get Out of Debt
If you are deep in debt, the idea of sitting down to crunch your numbers may make you anxious. But if you ever plan on getting out of the debt, you must take this important step. Making the minimum payment each month could cause your debt to persist for decades. When you have a complete overview of your debt situation and the exact number of years that it would take you to pay everything off at your current rate of payment, you can make informed decisions.
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Instructions
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1
List all of your debts on a Microsoft Excel spreadsheet. Include the creditor name, balance, minimum monthly payment and interest rate as columns.
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Create an additional column for "Months Until Paid Off." Since you already know how long the personal and mortgage loans will take to pay off at the current rate, you can go ahead and fill this information in.
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3
Open the Bankrate.com online financial calculator that allows you to calculate the number of months until you are out of credit card debt. See "References" for a direct link.
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Enter the balance, interest rate, and your current minimum monthly payments, then click "Calculate."
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5
Enter the number of resulting months by each corresponding debt in the "Months Until Paid Off " column of your Excel spreadsheet. Divide the months by 12 to see approximately how many years it will take to pay off each account.
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Review the total number of years it will take for you to get out of debt, especially the debt that will take the longest amount of time, and decide if this is acceptable for you. If not, decide on the number of months down the line when you want to be able to say that you have paid off all of your debt off completely. For instance, let's say that you want to pay off all debt within five years (60 months).
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Re-enter your balance and interest rate for each debt entry that is over your desired payoff time limit in the Bankrate calculator. This time, type in the number of months that you want to take to pay off the debt (60 months in this example) next to "Enter desired months until debt free:" column and leave the "Enter payment amount per month:" blank.
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Review the new minimum payment that you must make in order to meet your goals and enter it into the "minimum monthly payment" column of your Excel spreadsheet. Update the "Months Until Paid Off" column as well.
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Add up all of the new minimum monthly payments to see how much you need to put toward your debt each month.
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Tips & Warnings
This "get out of debt" plan requires that you cease using all of your credit accounts.
