Where r is the monthly rate (APR ÷ 12). Critically, your payment must exceed the monthly interest (balance × r) or the balance never falls. Paying even a little above the minimum shortens the payoff dramatically and slashes total interest.
Getting out of debt faster
High-interest debt like credit cards can take years to clear when payments are close to the interest charge. This calculator simulates your balance month by month to show the true payoff time and total interest — and how much a modest extra payment saves.
The single most powerful lever is paying more than the minimum: because interest compounds on the remaining balance, every extra dollar of principal pays off repeatedly.
Worked example
A $6,000 credit card balance at 22% APR with a $150/month payment takes about 64 months and roughly $3,500 of interest to clear. Raise the payment to $250 and it's gone in 30 months with about $1,600 interest — $100 more per month cuts the time in half and saves ~$1,900.
Snowball vs avalanche
With multiple debts, two proven strategies: the avalanche pays extra on the highest-APR debt first (mathematically cheapest), while the snowball clears the smallest balance first (fastest psychological wins). Both work — the best method is the one you'll stick to. Run each debt through this calculator to see its timeline.
Why minimum payments barely move the needle
Card minimums are typically ~1–3% of the balance — barely above the monthly interest charge, which is exactly how issuers extend repayment for years. The moment your payment meaningfully exceeds balance × APR ÷ 12, the payoff curve bends sharply in your favor. If the payment is below the monthly interest, the balance grows forever — the calculator flags this. Consolidating at a lower rate? Model the new loan in the loan calculator, and redirect freed-up payments into the compound interest calculator to see the flip side of the same math working for you.