How We Calculate Your Payoff

The monthly interest rate

We convert APR to a monthly rate like this:

r = APR / 12

A 24% APR is a 2% monthly rate. You will sometimes see it written as APR / 365 × 30.41667. That is the same number, because 365 divided by 12 is 30.41667.

Card issuers often work differently. The CFPB says many credit card companies calculate interest daily on your average daily balance. Our planner does not model that, so a real statement can differ from our estimate by a few dollars. The credit card interest calculator shows both figures for your own balance.

Why APR / 12 is an accepted method

Since the Credit CARD Act of 2009, your card statement must show how long paying only the minimum would take and what it would cost. Regulation Z (Reg Z), the federal rule that carries out the Truth in Lending Act, sets this out in §1026.7(b)(12). If that payoff takes longer than three years, the statement must also show the payment that clears the balance in 36 months.

Issuers compute those estimates with the method in Reg Z Appendix M1, which says: “A monthly or daily periodic rate may be assumed.” So the regulator accepts APR / 12 for the numbers on your own statement. Appendix M1 also treats a payoff estimate as accurate within 2 months either way, and assumes the final payment pays the account in full, as ours does. calculator.net’s amortization and debt payoff calculators and undebt.it use APR / 12 too, which is why we can test against them.

Interest is rounded to the cent every month

Each month, for each open debt:

interest = round_half_up(balance × r), to the nearest cent

Half a cent or more rounds up. Anything less rounds down. The interest is added to the balance before any payment is applied. On a $5,000 balance at 22% APR, the first month’s interest is $91.67.

Every amount is stored as whole cents and every APR to a thousandth of a percent, and the rounding uses whole-number math. That rules out floating-point drift, the stray fractions of a cent a computer can pile up when it approximates decimals over hundreds of months.

Some calculators carry unrounded balances and round only what they display. Over a long payoff the two methods can end a few cents apart, which explains most of the small gaps in the tests below.

What happens each month

The planner works through every month in this order:

1. Interest is added to every open debt.
2. Each debt gets its minimum payment, never more than it owes.
3. The rest of your monthly budget goes to the target debt, which is the first unpaid debt in your payoff order.
4. If the target gets paid off with money left over, the leftover goes to the next debt in the order that same month.

The final payment on each debt is exactly what is left, including that month’s interest. There is never a payment under one cent or an extra month with a few cents in it. Totals follow one rule, total interest = total paid − starting balances, so the schedule, the totals and the CSV export always agree.

Your monthly budget and rollover

monthly budget = sum of month 1 minimum payments + extra payment

The budget stays fixed for the whole plan. When a debt is paid off, its minimum payment stays in the budget and rolls over to the next target. When a percent-based minimum shrinks because its balance fell, the difference goes to the target too. Your total monthly payment stays the same until the final month.

Minimums only is the exception: each debt gets its own minimum and nothing else, with no extra and no rollover. It is there for comparison.

Minimum payment rules

A minimum can be a fixed dollar amount or a rule based on the balance:

• Percent of balance: minimum = max(floor, pct × B)
• Interest plus percent: minimum = max(floor, interest + pct × B)

B is the balance after that month’s interest has been added, and each result is rounded to the cent. If B is below the floor, the minimum is the whole balance and the debt is paid off. The presets are interest + 1% of the balance, 2% of the balance, and 3% of the balance, each with a $25 floor.

If a fixed minimum is smaller than a month’s interest, the balance grows even though you are paying. The planner warns you when that happens.

Payoff order

• Snowball: smallest starting balance first. A tie goes to the higher APR, then to the order you entered.
• Avalanche: highest regular APR first, ignoring promo rates. A tie goes to the smaller balance, then to the order you entered.
• Custom: your row order, top to bottom.
• Minimums only: no order, because no extra money goes anywhere.

The order is set once at the start and never changes. See debt snowball vs avalanche for how the two main orders compare.

Promo periods

A debt can have a promo APR, often 0%, for a set number of months. The promo rate applies in months 1 through N, and the regular APR applies from month N + 1. Avalanche ranks by the regular APR, so a card at 0% for 12 months and 27% after that ranks as a 27% card.

When a promo ends, a percent-based minimum can jump. If the minimums then add up to more than your monthly budget, the planner warns you.

One-time lump sums

A lump sum has an amount and a month, such as a tax refund in month 5. In that month it joins your extra money and goes to the current target debt, after interest and minimums.

Payment for a set number of months

To find the payment P that clears a balance B in n months:

P = B × r / (1 − (1 + r)−n)

At 0% APR this becomes P = B / n. P is rounded to the nearest cent, and the few cents that rounding leaves over or under are folded into the final payment, shown in the schedule. For $10,000 at 18% APR over 24 months, the payment is $499.24 and the total interest is $1,981.78.

Payoff time at a fixed payment

For a fixed payment, we run the monthly loop above until the balance reaches zero. If the payment does not cover the first month’s interest, the balance can never fall, and the calculator says “never”. At $200 a month, $5,000 at 22% APR takes 2 years, 10 months.

Goal seek: the extra payment for a target date

Pick a target month and the planner finds the smallest extra payment, in whole cents, that finishes the plan by then. Adding money never makes a plan longer, so the search can halve its range each round: try an amount between one that is too small and one that works, keep the half that holds the answer, and stop when the two ends are one cent apart. Each try runs the full plan. If no extra payment can reach the target, the planner says so.

Months, dates and the 1,200-month cap

Month 1 is your first payment, next calendar month by default, and every date label comes from that one rule. Guides show durations instead of dates so they don’t go stale. Plans stop at 1,200 months (100 years); a plan still running then is reported as never paying off.

What we do not model

• Daily-balance compounding. We use APR / 12 for every month.
• Fees, including annual fees, cash advance fees and late fees, and penalty APRs. The balance transfer calculator does include the transfer fee you enter.
• Variable rates. A rate tied to an index can change. We hold each APR fixed, apart from promo periods.
• New purchases or new borrowing on any debt.
• Deferred-interest promos, where interest for the whole promo period is charged if the balance isn’t paid in full by the end.
• Taxes, insurance and escrow on mortgages. Mortgage results cover principal and interest only.
• Payment timing within a month. Each payment lands once a month, after that month’s interest.

Tested against other calculators

The engine’s unit tests pin four reference cases, A to D. We ran each one through calculator.net and undebt.it’s public debt snowball calculator, checked on September 30, 2026, and the figures below are what those pages showed. The tests run before every deploy, so a change that breaks one of these results can’t go live. Our totals must land within 5 cents of calculator.net’s amortization and debt payoff calculators and of undebt.it.

Fixture A: $5,000 at 22% APR, $200 a month

• This site: 2 years, 10 months, total interest $1,749.90, final payment $149.90.
• calculator.net credit card calculator: 2 years and 10 months, $1,749.54 interest.
• undebt.it: 34 months, final payment $149.88, total paid $6,749.88.

calculator.net’s credit card and payment calculators solve for a fractional number of payments, about 33.75 here, and count interest as if the last payment covered part of a month, so their interest runs a little low. A real schedule has 34 payments. undebt.it rounds only for display while we round interest monthly, so the final payment can differ by a few cents.

Fixture B: $10,000 at 18% APR, paid off in 24 months

• This site: payment $499.24, total interest $1,981.78.
• calculator.net payment calculator: $499.24 a month, $1,981.78 interest.
• undebt.it, with the payment set to $499.24: 24 payments, then a 25th payment of $0.03.

The exact payment rounds down to $499.24, so a few cents remain after 24 payments. calculator.net reports interest as 24 payments minus the principal and doesn’t show the leftover. undebt.it adds a $0.03 stub payment. We fold the leftover into payment 24.

Fixture C: $25,000 car loan at 7% APR over 60 months

• This site: payment $495.03, total interest $4,701.82.
• calculator.net amortization calculator: $495.03 a month, $4,701.80 interest.
• undebt.it: $495.03 a month, 60 months, total paid $29,701.80.

With $100 a month extra, this site shows $939.02 saved in interest and 11 months off the loan. calculator.net shows 49 months, $3,762.80 in interest and $938.99 saved. undebt.it shows 49 months with a final payment of $201.36; calculator.net’s adds up to $201.37 because it rounds principal and interest separately. Both tools keep full precision, so our interest can sit a few cents from theirs.

Fixture D: two cards and a car loan, snowball

Card 1 is $2,500 at 24.99% with a $75 minimum, Card 2 is $6,000 at 19.99% with a $150 minimum, and a car loan is $12,000 at 6.5% with a $320 minimum. The extra payment is $300 a month. Snowball and avalanche pick the same order here, and the tests check that both return identical schedules.

• This site: 2 years, 4 months, total interest $2,718.28, total paid $23,218.28.
• calculator.net debt payoff calculator: 28 months, $2,718.32 interest, $23,218.28 total paid.
• undebt.it: 28 months, $2,718 interest (rounded to the dollar), $23,218.28 total paid.

calculator.net’s own total paid minus the $20,500 in starting balances is $2,718.28, four cents below its interest line, which adds up unrounded interest. We define interest as total paid minus principal, so our figures always reconcile.

Changelog

• 2026-10: Launch.

FAQ

Why is my statement different from your estimate?

Your card issuer probably charges interest daily on your average daily balance, while we use APR divided by 12 each month. Statements also include new purchases, fees and rate changes, which we leave out. Expect our estimate to differ from a real statement by a few dollars, more if you keep using the card.

Do you use daily compounding?

No. Every calculator here uses a monthly rate of APR divided by 12, with interest rounded to the cent each month. Reg Z Appendix M1, the method card issuers use for the payoff estimates on statements, allows a monthly rate. The credit card interest calculator shows how a daily rate would change one month’s interest.

Why round interest every month?

A card company charges interest in whole cents, so a statement never carries a fraction of a cent into the next month. Rounding each month copies that. Calculators that keep full precision and round only for display can end a few cents away from us over a long payoff, which is the whole difference.

How accurate is the debt-free date?

It is exact under the rules on this page and assumes you pay the same amount every month. Real life moves it: a missed payment, a new purchase or a rate change. For comparison, Reg Z Appendix M1 treats a statement’s payoff estimate as accurate if it lands within 2 months of the true figure.

Why does another calculator show a slightly different total?

Most gaps come from rounding. We round each month’s interest to the cent. Other tools keep unrounded balances, report interest for a fractional last month, or add a tiny stub payment at the end. The test section above shows each case, with calculator.net and undebt.it checked on September 30, 2026.