Cost-of-Debt Calculator
Combine your debts into one picture: total balance, blended interest rate and what that debt costs you in interest each month.
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.
- Debt 1 — balance
- $8,000
- Debt 1 — rate
- 22%
- Debt 2 — balance
- $15,000
- Debt 2 — rate
- 7%
- Debt 3 — balance
- $5,000
- Debt 3 — rate
- 12%
- Total monthly payment
- $900
on $28,000 of total debt
- Total debt$28,000
- Blended (weighted) rate12.18%
- Interest per month$284.17
The math behind it
The calculator adds your balances into one total, then computes a blended rate by weighting each debt's rate by its share of the total balance — a large balance pulls the blended rate toward its own rate. Multiplying the total by the blended rate gives the annual interest cost, and dividing by twelve gives the monthly cost. If your payment exceeds that monthly interest, it also amortizes the total at the blended rate to estimate a payoff timeline.
Assumptions & limits
- The blended rate is balance-weighted, so bigger debts count more.
- All debts are combined and paid as one pool at the blended rate.
- Each rate is fixed for the estimate.
- The payoff schedule appears only when your payment beats the monthly interest.
- No new charges are added while you pay the debt down.
Typical credit-card minimum payment formulas
Common issuer methods for the minimum due. The exact formula is set by your cardholder agreement.
| Method | Minimum due |
|---|---|
| Percent of balance | About 1% to 3% of the balance, plus that month’s interest and fees |
| Percent with a floor | The greater of the percentage or a fixed dollar floor (often $25–$35) |
Common questions
What is a blended or weighted interest rate?
It is the single rate that represents your whole debt load, with each debt's rate weighted by how much you owe on it. A $15,000 loan at 7% and a $5,000 card at 22% do not average to 14.5% — the larger, cheaper loan pulls the blend closer to 7%. The calculator does this weighting for you so you see the true cost of the mix.
Why does my debt cost so much per month even at a modest blended rate?
Interest is charged on the whole outstanding balance, so a large total generates a large monthly interest bill even at a middling rate. Seeing that monthly figure is often the wake-up call — it is money gone before a dollar touches principal, which is why targeting the highest-rate balance first pays off fastest.
Why does the payoff schedule sometimes not appear?
If your total monthly payment does not exceed the monthly interest, the balance would never fall, so no timeline is shown. Raise the payment above the interest figure the calculator reports and a payoff schedule appears.