How to Calculate Your Debt Payoff

Calculate your debt payoff so that you can rid yourself of debt and start saving for the future.

Many people who are in debt want to know one thing---when they will be out of it. Calculating a debt payoff date may help you stay on track when trying to tackle your debt. Calculating your debt payoff takes only a few minutes.

Things You'll Need

• Computer
• Internet access

Instructions

1. Gather all of your debt. Whether it's credit cards, car loans, personal loans or other types of debt, gather the statements for the amount of money you owe. Many people exclude their home mortgage when figuring out a debt payoff.

2. Record the amount of each debt alongside the interest rate that is being charged. Debt payoff calculators usually place columns for the debt owed beside the interest rate for that debt. Work your way down the calculator entering those amounts.

3. Enter the payments that you are making to those accounts. To receive an accurate indication of when that debt will be paid off, you must enter the amount of money you pay each month to each of those accounts. The more you pay, the faster the debt will be paid off.

4. Calculate your payoff date. Once the information has been entered, simply hit return and to see when your debt will be paid off.

Tips & Warnings

• Paying just a few dollars more than the minimum required can greatly reduce the number of months until a debt is paid off. For instance if you're paying a debt of $10,000 at 8 percent over 60 months, you can shorten that loan to almost 52 months by paying just $25 more per month. The payment would move from $203 to $228 per month.

References

• CNN Money: When Will You Be Debt Free
• Bank Rate: Credit Card Calculator
• Kankuratan: When Will My Bills Be Paid Off
• Dave Ramsey: Get Out of Debt with the Debt Snowball