How this calculator works
This page is a summary rather than a strategy. It adds your balances together, adds the payments together and calculates a weighted average rate, so each debt contributes in proportion to what you owe on it. Each debt is then simulated on its own at its stated payment until the balance reaches zero. Because the debts are treated separately, the months shown for the last one are the longest single payoff, not the result of redirecting payments between accounts. Use the debt payoff calculator to model snowball or avalanche ordering.
Formula
Total debt = sum of balances. Total payment = sum of payments. Weighted average rate = sum(balance × rate) / sum(balance). For each debt, monthly interest = balance × rate / 12 and the balance falls by payment minus interest until it reaches zero. Total interest is the sum of monthly interest charges across the debts.
Worked example
With balances of $2,000 at 4.9%, $6,000 at 19.99% and $15,000 at 7.5%, the total is $23,000. A $600 payment split as $100, $150 and $350 clears the debts in 21, 67 and 51 months respectively, so the last payment falls in month 67. Total interest at those separate payments is $6,570.74 and the weighted average rate is 10.53%.
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Frequently asked questions
Why is the weighted average rate not the simple average?
A large balance at a low rate matters more to your total interest than a small balance at a high rate. Weighting by balance reflects that, so the figure sits closer to the rate on the largest debt.
Why do the months not add up?
The debts run in parallel, not one after another. The last debt to clear sets the overall time, so the total is the longest single payoff rather than a sum.
What if one payment is too small?
If a payment does not exceed the monthly interest on that debt, the balance never falls. The calculator reports an error for that debt instead of returning a misleading term.
Should I use this or the debt payoff calculator?
Use this page to see the size and average cost of what you owe. Use the debt payoff calculator when you have extra money and want to compare snowball and avalanche orders.