Accelerated Debt Payoff Calculator
See how adding a fixed extra amount to your monthly debt payment accelerates payoff and cuts the interest you pay.
A worked example
Running this tool on current national benchmarks (Federal Reserve / Freddie Mac via FRED (St. Louis Fed)) — swap in your own numbers to see how the result moves.
- Total debt balance
- $18,000
- Average interest rate (APR)
- 18%
- Current monthly payment
- $450
- Extra monthly payment
- $200
debt-free 25 months sooner
- Current payoff5.2 yrs
- Accelerated payoff3.1 yrs
- Interest (current)$9,695
How the interest you would save changes with total debt balance
Holding the other inputs at the example above, here is how the result moves as total debt balance changes.
| Total debt balance | Interest you would save | Current payoff |
|---|---|---|
| $10,000 | $800 | 2.3 yrs |
| $15,000 | $2,400 | 3.9 yrs |
| $20,000 | $6,179 | 6.2 yrs |
| $25,000 | $16,601 | 10.1 yrs |
The math behind it
The calculator amortizes your balance twice at the same APR. First at your current monthly payment alone, then at that payment plus a fixed extra. Each month interest is charged on the balance and the rest of the payment reduces principal; because the extra is added after interest, it goes straight to principal. Subtracting the accelerated payoff from the current one gives the months saved and the interest saved.
Assumptions & limits
- A single blended APR is applied to the whole balance.
- The interest rate is fixed for the entire payoff.
- Your current payment and the extra stay the same every month.
- No new debt is added to the balance during payoff.
- Your payment must exceed the first month's interest, or the balance never falls.
Common questions
Why does a small extra payment save so much interest?
Because the extra skips interest entirely and reduces principal directly. A smaller principal is charged less interest next month, which frees more of your regular payment for principal, and the effect compounds. On high-APR debt, even a modest steady extra can cut years and thousands of dollars.
Is it better to increase my payment or make a lump-sum payment?
Both help; a lump sum toward principal today saves the most because it stops interest on that amount immediately, while a steady extra saves through consistency. This tool models a fixed monthly extra. If you have a windfall, applying it as a one-time principal payment and then keeping the higher monthly amount compounds the benefit.
What if my payment barely covers the interest?
Then almost nothing goes to principal and the balance stalls — the calculator flags this and shows the minimum payment needed to make progress. You must pay more than the monthly interest before any acceleration is possible.