What is Debt Payoff Calculator?
Debt payoff calculator is online software that can help you manage money for paying off all your debts — credit card and others. This application is easy to use for simulating different monthly repayment amounts to find its interest cost effect for a defined payment amount. You can also use the debt repayment calculator to set a realistic payoff goal.
How Debt Payoff Calculator Works
There are three inputs for the debt reduction calculator to work: debt balance, annual interest rate and current monthly payment. All you have to do is fill in your outstanding debt, the APR and the monthly installment you are making. The repayment calculator would then compute the several years and months needed for you to payoff the debt completely.
There are two calculation results you can get from a debt payoff calculator. First, the online software allows you to simulate the effect of adding extra payment on the time it takes to be debt-free and the cost of the loan — primarily the interest charges. It also helps you set your payoff goal by taking into account the sources of funds you can tap for making the monthly payment.
How to Use a Debt Pay Off Calculator
The debt payoff calculator is easy to use. All you have to do is to enter info for your debt balance, annual interest rate and current monthly payment.
If you opt for “What will happen if I pay extra $” and fill in a specific amount, the debt repayment calculator instantly will show you the time and cost comparison between the existing payment amount and one with the extra payment.
If you go with a payoff goal “How to be debt-free after” and input specific years and months, the debt reduction program will calculate the new payment amount for you to reach the goal.
You want to use the two options for simulating different repayment plans. For this purpose, simply compare the figures with your annual debt budget to find a new monthly payment plan that you can afford. This usually involves balancing the total amount you’ll be paying to cover the entire loan and the amount of time it takes to be debt-free.