Debt Payoff Planner Methodology

The planner estimates payoff timing, interest paid, total paid, strategy order, and savings versus a minimum-payment baseline. It models included debts only and uses the balances, APRs, minimum payments, and payment assumptions you enter.

Interest is calculated month by month using a simple monthly APR conversion. Each month, estimated interest is added to the current balance before payments are applied.

monthlyInterest = currentBalance * APR / 100 / 12

The planner uses fixed user-entered minimum payments. Real credit card minimum payments may change as balances decline, and lenders may calculate minimums differently. If a minimum payment appears too low to cover monthly interest, the planner shows a warning.

Avalanche makes minimum payments on all included debts, then sends remaining payoff budget to the active debt with the highest APR. This usually lowers estimated interest compared with targeting lower-rate debt first.

Snowball makes minimum payments on all included debts, then sends remaining payoff budget to the active debt with the lowest balance. It may cost more interest than avalanche, but it can create earlier visible payoff milestones.

Custom order uses the priority number on each debt. Lower priority numbers are paid first after minimum payments. If priority numbers are tied, APR and balance are used as tiebreakers.

Extra monthly payment is added to the available payoff budget each month. After minimum payments, the remaining budget is directed to the current target debt based on the selected strategy. A one-time payment can also be applied in a selected month.

If rolling payments forward is enabled, the starting total minimum payment plus your extra payment stays in the monthly payoff budget until the included debts are paid off. If reducing payments is selected, minimum payments disappear from the budget as debts are paid off.

The minimum-only baseline uses no extra payment, no one-time payment, and a reducing monthly payment budget as debts are paid off. The selected strategy is compared with this baseline to estimate interest saved and months saved.

The balance transfer section is separate from the main payoff plan. It starts with the transfer amount plus the entered transfer fee, applies the promotional APR during the promo period, then applies the post-promo APR afterward. The calculator shows estimated payoff timing, interest, total cost, and whether a balance remains after the promo period.

This MVP does not include exact lender terms, late fees, penalty APRs, credit score effects, tax consequences, settlement or bankruptcy scenarios, exact credit card minimum payment formulas, balance transfer approval odds, or professional debt advice.

These calculators are for educational purposes only and are not financial, tax, legal, insurance, investment, real estate, employment, medical, childcare, vehicle-buying, or professional advice.

This calculator is for educational purposes only and is not financial, legal, credit, debt, bankruptcy, tax, or professional advice. Consider qualified guidance for major debt, legal, credit, or financial decisions.