Debt Payoff Optimization Calculator

Debt Payoff Optimization Calculator

Paying off debt early can reduce total interest paid. Also, paying off the debts with the highest interest rates first may reduce total interest paid. This calculator suggests one way to potentially optimize payment of your debts, by first making minimum payments required for each debt, and then allocating any remaining dollars to debts with the highest interest rate(s). This is compared with payments made according to your entries below.

Current Debts

For credit cards (first three lines), the regular payment method will make payments equal to the larger of the monthly payment you enter or the minimum payment required. Minimum payment factors are set by your credit card issuer. This calculator treats the minimum payment as equal to the greatest of (1) a minimum percentage multiplied by the card's balance, (2) a (usually lower) minimum percentage multiplied by the card's balance plus interest on the balance, or (3) the minimum amount (for example, $15 or $25). Some cards use either factor (1) or (2) (rather than both factors) along with factor (3). In that case, you can make either (1) or (2) (but not both) not applicable by selecting N/A for the percentage. To project only minimum payments, enter $0 for a credit card's monthly payment. For other loans (last three lines), this calculator treats the minimum payment as being the same as the regular monthly payment you enter.

				Minimum Payment Factors
Debt Name	Balance	Interest Rate	Monthly Payment	Minimum Pct.	Minimum Pct. Plus Interest	Minimum Amt.	Initial Minimum Payment
	$	%	$			$	$
	$	%	$			$	$
	$	%	$			$	$
	$	%	$				$
	$	%	$				$
	$	%	$				$
Total			$				$

Pay Off Debt

Monthly Dollars Available (including current payments)	$
This amount will be used first to make the minimum payment required for each debt, and then any remaining dollars will be allocated to outstanding debts with the highest interest rate(s). This amount must not be less than the greater of the total for the initial minimum payments for all credit cards and loans or the total for all the monthly payments you entered.

This calculator assumes that no other amounts are borrowed (except for any negative amortization where a monthly payment is less than the monthly interest) with respect to the debts listed.

This calculator assumes fixed interest rates and minimum payment factors that do not change. The interest rates and minimum payment factors for some debts can change over time.

This calculator does not take into account the effect of federal or state taxes, or any fees.

Payments are assumed to be due and made at the end of each month. Actual due dates may vary for each debt.

This calculator should be used as a general guide only. Every situation is unique, and this calculator illustrates just one possible approach to minimizing overall interest paid on your debts. Discuss the results of this calculator with your financial professional.