Loan Payoff Calculator
Calculate how long it will take to pay off any loan — credit card, student loan, car loan, personal loan — at a fixed monthly payment. Shows months to payoff, total interest paid, total amount paid, and your expected payoff date.
Quick answer
Months to payoff ≈ −log(1 − (balance × monthly_rate / payment)) / log(1 + monthly_rate). The calculator above simulates month by month for a readable answer. Extra payments reduce both the timeline and total interest dramatically.
Loan Payoff Calculator
How loan payoff is calculated
The calculator simulates the loan month by month. Each month, interest accrues on the
current balance (interest = balance × annual_rate / 12), then your payment
is applied — some goes to interest, some to principal. Month by month, the principal
shrinks and more of each payment goes to reducing the balance rather than paying interest.
The process repeats until the balance hits zero.
There's also a closed-form formula that solves the whole thing in one step:
n = −log(1 − (balance × r / payment)) / log(1 + r), where r is the monthly
rate. The simulation and the formula give the same answer, but the simulation is easier to
explain and naturally handles edge cases like the final partial payment.
When to use it
Use this calculator before making any debt payoff decision: deciding whether to throw a tax refund at a credit card, evaluating the benefit of an extra $100 on a student loan, or seeing if you can actually hit a "debt-free by Christmas" goal. Run the numbers twice — once at your current payment, once at the proposed new payment — and compare the total interest column. The difference is exactly what you'd save.
Common mistakes
- Paying the minimum on a high-interest card. Minimums are often set so low that most of the payment goes to interest. A $5,000 credit card balance at 22% APR with a $100/month payment takes over 7 years to clear and costs $4,500+ in interest.
- Focusing on low-balance loans first. The "debt snowball" method (smallest balance first) feels good but costs more total interest than the "debt avalanche" (highest rate first). Pick one based on your psychology.
- Ignoring compound effects. An extra $50/month early in the loan saves far more than an extra $50/month late, because early payments reduce the principal that all subsequent interest is calculated on.
- Cashflow-broke but debt-paying. Don't drain your emergency fund to accelerate debt payoff. One unexpected car repair and you're back on the credit card.
Frequently asked questions
How do I calculate loan payoff?
The calculator simulates each month: add interest, subtract the payment, repeat until the balance hits zero. The number of iterations is the payoff timeline.
How much does an extra payment save?
More than you'd expect. On a 22% APR credit card, an extra $50/month can shave years off the payoff and thousands in interest.
Should I pay off low-interest debt or invest?
Generally: pay off anything above ~7% APR first, invest anything below ~4%. The 4–7% range is a judgment call.
What happens if my payment barely covers interest?
The balance shrinks by almost nothing each month. If your payment is less than the monthly interest, the loan grows instead of shrinking.