Debt Repayment Calculator

What is Debt Repayment?

Debt repayment involves paying back borrowed money over time. This can include credit card debt, loans, or other obligations, often with interest. Proper planning can help minimize interest paid and reduce the time to become debt-free.

How Does the Debt Calculator Help?

The Debt Calculator helps you:

• Understand how long it will take to pay off your debts.
• Compare repayment strategies: Avalanche (highest interest first) and Snowball (lowest balance first).
• Estimate the total interest paid and potential savings with extra payments.
• Visualize your debt repayment journey with charts and tables.

How to Use the Debt Calculator

Follow these steps to use the calculator effectively:

1. Enter the details of your debts, including balance, interest rate, and minimum payment.
2. Choose a repayment strategy: Avalanche or Snowball.
3. Optionally, add an extra monthly payment to speed up repayment.
4. Click "Calculate Repayment Plan" to see your results.
5. Review the charts, summary, and schedule to plan your next steps.

FAQs

1. What is the Avalanche Method?

The Avalanche Method prioritizes paying off debts with the highest interest rates first. This minimizes the total interest paid over time.

2. What is the Snowball Method?

The Snowball Method focuses on paying off the smallest balances first. This provides quick wins and can help motivate continued progress.

3. How Does Extra Payment Affect Debt Repayment?

Adding extra payments reduces the balance faster, lowering interest paid and shortening the repayment timeline.

4. Which Strategy is Better: Avalanche or Snowball?

The best strategy depends on your goals. Avalanche saves more money, while Snowball builds momentum with quicker wins.

Why is Debt Repayment Important?

Paying off debt frees up money for savings and investments, reduces financial stress, and improves your credit score. Using tools like this calculator can help you stay on track and achieve financial freedom efficiently.