Debt Calculator
The Debt Calculator visualizes different approaches to paying off debt and shows exactly how long it will take and how much interest you’ll pay.
Getting Started
Enter Your Debt Information
The Creditor Information Table allows you to enter all your debt details:
- Creditor: Name of the lender (e.g., “Chase Visa”, “Mortgage”)
- Balance: Current amount owed
- Interest Rate: Annual percentage rate (APR)
- Min Payment: Minimum monthly payment required
All fields are editable in the table. Click “Add Debt” to create new rows. Click the trash icon to remove debts.
Important: Your debts automatically sync with your Balance Sheet. Changes made here appear there, and vice versa.
Set Calculator Settings
Balance Date: The month you’re starting your debt payoff journey.
Total Monthly Payment: How much total you can afford to pay toward all debts each month. This must be at least as much as all your minimum payments combined.
Payoff Strategy: Choose how you want to prioritize which debts to pay off first (see strategies below).
Results
The calculator shows:
- Total Interest Paid: How much you’ll pay in interest charges over the life of all debts
- Debt Free Date: When you’ll make your final payment
- Months to Pay Off: Total months until debt-free
- Creditors in Chosen Order: Each debt’s payoff timeline and interest cost
The Six Payoff Strategies
1. Lowest Balance First
How it works: Pay minimums on all debts. Put all extra money toward the debt with the lowest balance.
Best for: People who need psychological wins to stay motivated. Quick wins build momentum.
Example: You have a $500 credit card, $3,000 car loan, and $10,000 student loan. Pay off the $500 first, then roll that payment into the $3,000, then tackle the $10,000.
2. Highest Interest First
How it works: Pay minimums on all debts. Put all extra money toward the debt with the highest interest rate.
Best for: Disciplined people focused on optimal math. Saves the most money in interest.
Example: You have debts at 22%, 7%, and 4% interest. Attack the 22% debt first, regardless of balance.
3. Table Order
How it works: Pay off debts in the exact order they appear in your table, from top to bottom.
Best for: When you have a specific reason to prioritize debts in a certain order (e.g., co-signed loan, debt to family member).
4. Minimum Payments Only
How it works: Pay only the minimum payment on each debt. No extra payments are applied.
Warning: This is the most expensive option and takes the longest time.
Use case: Temporarily when you’re in a tight financial situation, or to see how much worse this approach is compared to other strategies.
5. Custom - Highest Order First
How it works: You assign a custom priority number to each debt (higher numbers = pay first). The calculator pays them off in that order.
Best for: When you have specific knowledge about your situation that standard strategies don’t capture.
Example: You might prioritize a 0% promotional rate debt that’s about to jump to 25%, even though it’s not highest interest right now.
6. Custom - Lowest Order First
How it works: Same as Custom - Highest Order First, but lower numbers get paid first.
Best for: Flexibility in custom ordering based on your preferences.
Understanding Your Results
The Snowball Effect
When you pay off one debt, that payment doesn’t disappear - it “snowballs” onto the next debt.
Example:
- Debt A: $100 minimum
- Debt B: $200 minimum
- Debt C: $150 minimum
- Your budget: $500/month
Initial extra payment: $500 - $450 = $50
When Debt A is paid off, you now have $150/month going to the next debt ($100 from Debt A + $50 extra). The snowball grows.
The green “Initial Snowball” indicator shows how much extra money you have after paying all minimums. This is your accelerator.
Insufficient Minimum Payments
If you see a yellow warning about “Insufficient Minimum Payments,” one or more debts have minimum payments that are less than the monthly interest charge. The balance will grow, not shrink, even though you’re making payments.
How to fix it:
- Increase your total monthly payment budget
- Increase the minimum payment for that specific debt
- Consider refinancing high-interest debt
Reading the Results Table
Creditors in Chosen Order shows each debt in the order they’ll be paid off:
- Original Balance: Starting amount owed
- Interest Paid: Total interest charges (not principal - purely the cost of borrowing)
- Total Paid: Original Balance + Interest Paid
- Months to Pay Off: How many months until this specific debt is eliminated
- Month Paid Off: The actual month/year when you’ll make the final payment
Comparing Strategies
Try different strategies and compare:
- Interest Paid: Lower is better
- Debt Free Date: Earlier is better
- Creditors in Order: Does this ordering feel motivating? Can you stick with it?
Key insight: The mathematically optimal strategy (Highest Interest First) isn’t always the best strategy for you. If Lowest Balance First’s psychological wins keep you motivated and on track, it’s worth the extra interest.
Integration with Balance Sheet
Your debts live in the Balance Sheet under Liabilities. The Debt Calculator:
- Pulls all liabilities with balances > $0
- Uses the interest rates and minimum payments you’ve set
- Syncs changes bidirectionally
Changes sync automatically. No manual import/export needed.
Tips for Success
Be Realistic: Don’t set an unrealistic total monthly payment that you can’t sustain. Be honest about what you can afford month after month.
Account for Variable Income: If your income varies, base your total monthly payment on your minimum monthly income, not your maximum.
Review and Adjust: Come back monthly and update actual balances, current interest rates, realistic minimum payments, and affordable total monthly payment.
Extra Payments: When you get extra money (tax refund, bonus, gift), apply it to your target debt. The calculator will recalculate with your new lower balance.
Common Questions
Q: Why is my interest paid so high?
A: Check if your minimum payment is less than monthly interest. Long payoff timelines mean years of accumulating interest charges.
Q: Should I focus on debt or savings?
A: Generally: Eliminate high-interest debt (>7%) before aggressive saving. Keep a small emergency fund ($1,000-$2,000), then attack high-interest debt. Once eliminated, build full emergency fund and invest.
Q: What about 0% promotional rates?
A: Use Custom strategy. Prioritize these debts to pay them off before the promo expires and rates jump.
Q: My debt-free date is years away. Is this hopeless?
A: No. Just information. It might motivate you to increase total monthly payment, refinance high-interest debt, or sell assets to eliminate debt faster.
Q: Can I trust these calculations?
A: The math is solid and based on standard amortization calculations. Results are estimates - actual results depend on interest rate changes, sticking to the payment plan, not adding new debt, and payments being made on time.