Debt Payoff Calculator

Use our debt payoff calculator to understand how to accelerate your pay down plan to get you out of debt as soon as possible. As you pay off each debt, the freed up money is then applied to the next debt. Repeat this process with the Avalanche or Snowball method until you are debt free.

How Monarch’s multiple debt payoff calculator works

Our debt paydown calculator creates a realistic debt payoff plan for you. We use the information you provide about each of your debts plus your current budget for monthly payments to drive accurate results. Enter up to six different debts, and we’ll design a personalized payoff plan, including a visual timeline of your debt payoff schedule, the amount of interest you’ll pay over time, and your debt-free date based on two different strategies.

Components of Monarch’s debt payoff calculator

Loan name: The term you use to identify each of your debts, whether by lender name, type of debt, or a nickname you use. This field helps you keep track of what’s what.
Current balance: The total amount you owe your lender through today’s date. This includes all posted debts and can change daily, depending on your activity. According to the Consumer Financial Protection Bureau, your current balance may not reflect how much you still owe from your outstanding balance. To make sure your Current Balance entry is up to date, refer to your most recent statement.
Minimum payment: The lowest amount you can pay on loan each month. Making minimum payments is how you avoid late fees and keep your account in good standing. To make sure your Minimum Payment entry is up to date, refer to your most recent statement.
Interest rate: The cost you pay your lender for borrowing money on top of your minimum payment. Interest rates are determined by a number of factors, including the Federal Reserve and your credit score. The higher the interest rate, the more you’ll pay over the life of your loan. To make sure your Interest Rate entry is up to date, refer to your most recent statement.
Total monthly debt budget: The full monthly amount of money you set aside in your budget for debt repayment. This amount must cover your total monthly minimum payments to avoid late fees and keep your account in good standing. We recommend that your Total Monthly Debt Budget amount covers more than the minimum on each of your debts whenever possible. You’ll save interest with extra payments above the minimum over the life of your loan.

Debt avalanche method vs debt snowball method

Our debt repayment calculator uses the same proven debt paydown methods that our financial experts recommend. The main difference between these two is whether you prioritize interest rates or balances.

Avalanche method

The debt avalanche method is a loan payoff strategy that prioritizes your debt from highest to lowest interest rate. (At Monarch, we consider debts with high rates as anything at 7% and above.)

How Monarch’s debt avalanche calculator works:

The debts you provided will be prioritized from highest to lowest interest rate.
We’ll generate a debt-elimination timeline based on your current monthly payoff budget for the debt with the highest interest rate.
You can adjust your monthly payoff budget to see how paying more above the minimum will impact your timeline.

Putting the avalanche method into action:

Pay the maximum that you budgeted for your debt with the highest interest rate.
Make minimum payments on the rest of your debts.
Continue this until you’ve eliminated the debt with the highest interest rate.
Identify your next debt with the highest interest rate and pay the exact same amount as you did before. This is what creates the “avalanche” effect on your remaining debts.
Remember to keep making minimum payments on your remaining debts.

Snowball method

The debt snowball method is a loan payoff strategy that prioritizes your debt from lowest to highest balances.

How Monarch’s debt snowball calculator works:

The debts you provided will be ordered from lowest to highest balance.
We’ll generate a debt-elimination timeline based on your current monthly payoff budget for the debt with the lowest balance.
You can adjust your monthly payoff budget to see how paying more above the minimum will impact your timeline.

Putting the snowball method into action:

Pay the maximum that you budgeted for your debt with the lowest balance.
Make minimum payments on the rest of your debts.
Continue this until you’ve eliminated the debt with the lowest balance.
Identify your next debt with the lowest balance and pay the exact same amount as you did before. This way you're able to put more money toward larger balances, which has a “snowball” effect on your remaining debts.
Remember to keep making minimum payments on your remaining debts.

Is it better to pay off the highest interest or smallest balance first?

Both methods have pros and cons:

Paying off high interest first using the debt avalanche method requires a larger amount of money to get started. It could be better to use if your debts have interest rates at 7% or higher. Another reason it could be better is if you’re motivated by paying as little interest as possible. This method doesn’t offer quick wins, but it does set you up for savings down the line to use toward other goals. Paying off high-interest debt first is also one of the best money goals for couples who want long-term security and stability.
Paying off a small balance first using the debt snowball method is a more approachable way to begin eliminating debt. It could be better to use if you want to see consistent progress, especially at the start. This method also can offer a more emotional vs mathematical payoff. While you will pay more interest over time, it could be better to prioritize small wins to boost your financial confidence and keep you motivated to pay off your remaining debts.

Ultimately, it’s better to choose the debt paydown method that suits your situation. Along with the amounts you owe, their interest rates, and other financial information, the National Foundation for Credit Counseling also recommends considering your financial personality.