1. What is the Debt Payoff Calculator?

The Debt Payoff Calculator estimates how long it will take to pay off a debt based on your monthly payment, current balance, and interest rate. It uses the same calculation method as Bankrate's debt payoff tool.

2. How Does the Calculator Work?

The calculator uses the debt payoff equation:

Where:

• \( PMT \) — Monthly payment amount (USD)
• \( Balance \) — Current debt balance (USD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( \log \) — Natural logarithm function

Explanation: The equation calculates how many months are needed to pay off debt when making fixed monthly payments that cover both principal and interest.

3. Importance of Debt Payoff Calculation

Details: Knowing your payoff timeline helps with financial planning, budgeting, and evaluating different repayment strategies like debt snowball or avalanche methods.

4. Using the Calculator

Tips: Enter your actual monthly payment, current balance, and annual interest rate. The calculator assumes fixed payments and interest rate throughout the payoff period.

5. Frequently Asked Questions (FAQ)

Q1: What if my payment is too low to pay off the debt?
A: The calculator will show "∞" if your payment doesn't cover the monthly interest (PMT ≤ Balance × r).

Q2: How accurate is this calculator?
A: It's mathematically precise for fixed-rate loans with fixed payments. For variable rates or changing payments, results are estimates.

Q3: Does this work for credit cards?
A: Yes, as long as you make consistent payments and the interest rate stays the same.

Q4: What's the difference between this and amortization?
A: This gives total months to payoff, while amortization shows payment-by-payment breakdown of principal/interest.

Q5: How can I pay off debt faster?
A: Increase monthly payments, make biweekly payments, or reduce the principal with lump sums.