Debt Payoff Calculator
Got a loan or credit card balance you want to clear? Enter the outstanding amount, interest rate, and what you can pay monthly. You'll see how long it takes and how much interest you end up paying - which is often a wake-up call.
How to use
- Enter the current outstanding balance.
- Enter the interest rate. Credit cards are usually 36-42% annually in India, so don't underestimate this.
- Enter what you can realistically pay each month. The tool also shows what you'd need to pay to clear it in 3 or 5 years.
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Most people pay the minimum on credit card debt without realising how long it actually takes to clear. A Rs.1 lakh balance at 36% annual interest with a Rs.2,500 monthly minimum takes over 7 years and costs nearly Rs.1.2 lakhs in interest alone - more than the original debt. The minimum payment trap is real.
This calculator shows the payoff timeline and total interest for whatever payment amount you choose. Try bumping your monthly payment by Rs.500 and watch how dramatically the timeline shrinks. The relationship is not linear - small increases in payment have an outsized impact on total interest when rates are high.
Frequently Asked Questions
What is the avalanche vs snowball debt payoff method?
Avalanche: pay minimums on all debts and throw extra money at the highest-interest debt first. Snowball: focus on the smallest balance first regardless of rate. Avalanche saves more in interest; snowball gives faster psychological wins.
Why does paying just the minimum take so long?
Minimum payments are often 2-5% of the outstanding balance. Since the balance shrinks slowly, the minimum shrinks too - you end up paying progressively less while interest keeps accruing on a still-large balance.
Does extra payment go to principal or interest?
Interest accrues first each billing cycle. Any payment beyond the accrued interest reduces the principal. That is why even Rs.500 extra per month makes a large difference - all of it goes straight to principal.
Disclaimer: Results are estimates for informational purposes only and do not constitute financial, tax, or investment advice. Figures may vary based on actual terms. Always consult a qualified financial advisor before making financial decisions.