A debt payoff plan is a list of your debts, a fixed monthly amount you’ll put toward them, and an order for paying them off. Pay the minimum on every debt, send the extra to one target, and roll each freed payment into the next target. Then automate it, track it, and update it when your situation changes.

Run your numbers in the debt payoff calculator. Enter your debts and your extra payment and it builds the month-by-month plan for you, with your debt-free date and total interest.

1. List every debt

Pull your latest statement or online account for each debt and write down five things:

  • The current balance.
  • The APR. For a card with a promo rate, note the promo rate, the month it ends, and the regular APR after it.
  • The minimum payment.
  • The due date.
  • Whether the promo is deferred interest. The CFPB explains that with deferred interest, missing the payoff deadline can mean owing all the interest back to the purchase date.

Include cards, car loans, personal loans, student loans, medical bills and money owed to family. Most people leave the mortgage out of a payoff plan and handle it separately.

If you’re already behind on a bill, the FTC’s advice is to call the creditor right away, before a debt collector gets involved, and explain what’s going on.

2. Pick a payoff order

The order decides which debt gets your extra money first. Three common choices:

  • Snowball: smallest balance first. Fastest first payoff. See the debt snowball method.
  • Avalanche: highest APR first. Usually the lowest total interest. See the debt avalanche method.
  • Custom: your own order, for deadlines or personal reasons.

If you’re torn, the snowball vs avalanche comparison runs both on the same debts. Some situations override both rules, such as a promo about to expire or a debt in collections. Which debt to pay off first covers those.

3. Find extra money

The extra you add on top of your minimums does most of the work. The FTC suggests starting with a budget: gather your bills and pay stubs, see where the money goes, and look for spending you can change.

Other sources people use:

  • Canceling subscriptions and services you don’t use.
  • Raises, tax refunds and bonuses, sent to the target debt as one-time payments.
  • Selling things you no longer need.
  • Asking your card issuer for a lower rate. It costs nothing to ask.

Here’s what a fixed budget does. Take two credit cards and a car loan: Card 1 at $2,500 and 24.99% ($75 minimum), Card 2 at $6,000 and 19.99% ($150 minimum), and a car loan at $12,000 and 6.5% ($320 minimum). With $300 a month extra, the plan’s monthly budget is $845.00. You’re debt-free in 2 years, 4 months, with $2,718.28 in interest. Paying only the same minimums with no extra and no rollover takes 5 years, 7 months and costs $7,227.22.

4. Automate your payments

Set every minimum payment to autopay from your checking account, timed a few days after payday. A missed minimum brings late fees, and on a deferred-interest promo the CFPB notes that being more than 60 days late can cost you the promo.

Then schedule the extra payment to your target debt on the same day each month. When the target is paid off, move that automatic payment to the next debt on your list. That single change is the rollover. Without it, a paid-off debt’s minimum drifts back into your spending.

5. Track your progress

Once a month, record each balance and compare it with the plan. A spreadsheet works well for this. Use the debt payoff spreadsheet to log what you actually paid next to what the plan expected.

Tracking also catches problems early: a new charge on a card you’re paying down, an APR that changed, or a payment that didn’t post.

6. Adjust when things change

Rebuild the plan in the calculator whenever something moves:

  • A debt is paid off: roll its payment forward and check that your autopay follows.
  • A rate changes: re-sort if you’re using the avalanche.
  • You get a windfall: add it as a one-time payment to the target debt.
  • Your income drops: cut the extra, keep every minimum, and restart the extra when you can.
  • A new debt appears: add it to the list and re-sort.

Our calculator keeps your budget fixed at your starting minimums plus your extra. When a debt is paid off, its minimum stays in the budget and goes to the next target. Real statements can differ from the plan by a few dollars because issuers usually charge interest daily. The methodology page explains every rule.

FAQ

How can I create a debt payoff plan?

List every debt with its balance, APR, minimum and due date. Decide on a fixed monthly amount above your minimums. Choose an order, such as smallest balance or highest rate first. Automate the minimums, send the extra to one target, and roll each freed payment to the next debt.

How much extra should I put toward debt each month?

Whatever you can pay every month without missing bills or borrowing again. A steady amount you keep up beats a larger amount you abandon. Try a few values in the calculator to see how each one changes your debt-free date and total interest, then pick one you can sustain.

Should I stop saving while I pay off debt?

Not entirely. The SEC’s Investor.gov notes that an emergency fund can keep an unexpected expense from turning into new debt. Ramsey’s plan, for example, sets aside $1,000 before starting the snowball. Our guide on paying off debt or investing covers emergency funds and employer 401(k) matches in more detail.

What if I can’t afford all my minimum payments?

Call your creditors before you fall behind. The FTC suggests explaining your situation and trying to work out a new payment plan with lower payments. A nonprofit credit counselor can also review your budget and may suggest a debt management plan, where creditors sometimes lower rates or waive fees.

How often should I update my payoff plan?

Check it monthly when you record balances, and rebuild it whenever a debt is paid off, a rate changes, your income changes or you add new debt. The order and the debt-free date can shift after any of these, so rerun the numbers instead of guessing.