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For my monthly debt payoff progress posts, you may have noticed the graphs, charts and tables I post with them. These are a great way to visualize my progress and share it with you. I got them easily from an online debt payoff calculator, and I’m about to show you how to use one.

Using a debt payoff calculator is easy, and much more accurate than trying to build your own using formulas and a spreadsheet.

Simply put, a debt payoff calculator is a tool that allows you to input your total amount owed, interest rates on each, and how much you are putting towards them each month. The debt payoff calculator then crunches the numbers and tells you exactly how long it will take to pay off your debts.

This is a good way to get a realistic picture of what you are in for. I recommend doing it at the beginning of your debt freedom journey. It really helps keep you from over or underestimating how long it’s going to take.

How Do You Use a Debt Payoff Calculator?

Let’s start out by doing. I’m going to show you the online debt payoff calculator I recommend. It is from

They actually refer to it as a debt restructuring calculator or an accelerated debt payoff calculator. This means it performs two functions: it shows you your current progress, and it will show you how much time and money you will save if you accelerate (pay more each month) your debt payoff.

Let’s use a fictional debtor and run their numbers for paying off credit card debt. Mr. Smith owes $10,000: three thousand on a credit card and seven thousand on a student loan. His monthly minimum payments are $50 and $200 respectively. His interest rate on the credit card is 15%, and 6% on the student loan.

All we have to do is enter his data (creditor, amount owed, amount paid, and interest rate).

debt payoff calculator

We then scroll to the bottom of the debt payoff calculator and ignore the Additional Debt Payments section. In the Assumptions, section, we select the repayment method Lowest to Highest Balance (because we like to pay off our debts this way; if you prefer highest interest rate first, you can select that). I also changed the Interest Earned on New Savings from 5% to 0.7%, a more realistic number for these times (this feature is just so you can see the benefit of paying off debt versus saving/investing).

By pressing Submit, we see his current situation, without acceleration, looks like this:

debt payoff calculator
The Calculator compares two methods of debt repayment and concludes:

“While keeping your payment level at $250 you could reduce your total debt payments (principal and interest) from $13,294 to $12,113 and be out of debt in 4.2 years instead of your current projected 9.4 years. This represents a reduction of $1,181 and 5.2 years. Further, once all debts have been paid off, you could invest the same monthly payment amount at 0.70% and accumulate a savings account balance $15,007 over that same time period.”

So by using a debt snowball calculator or rollover, we save over $1,100 and 5.2 years. It also shows us that if we use the rollover method and invest that $250 a month in a savings account, we will end up with over $15,000 by the end of the time period of just using the non-rollover method.

This is interesting information and an extra feature on this particular debt payoff calculator, but not very important for getting out of debt.

Using an Accelerated Debt Payoff Calculator

Now we have our baseline for Mr. Smith. It will take him 4.2 years to get out of $10,000 in debt by paying just $250 per month.

That is way too long for most of us.

Fortunately the debt payoff calculator also allows us to run the numbers and see how it would look if we can find extra money to throw at the debt.

So by returning to the section labeled Additional Debt Payments, we can plug in Mr. Smith’s extra monthly payment. Let’s assume that he is able to significantly cut his food and entertainment spending, maybe he even sells his car, and is able to put an additional $750 per month towards his debt.

We re-run the numbers by adding $750 in the Additional Monthly Payment box and see that:

debt payoff calculator

Now we can see that with his accelerated debt payoff plan, he can knock out his $10,000 debt in one year using the rollover method, instead of 4.2. Additionally, he will save over $3,000.

From this, we can truly see the power of finding extra money to put towards our debt.

Why Use an Online Debt Payoff Calculator?

A debt payoff calculator is a great tool to assess where you are at, where you are going, and how your hard work can save you time and money when paying off debt. See our other page for a debt consolidation loan calculator.

They are easy to use, easy to understand, and I consider them a critical tool for the DIY debt destroyer.