Debt payoff calculator: how long until your debt is paid off

How it's calculated

Month by month, as with any fixed-payment loan. Each month, interest is added on what you owe; your payment covers that interest first, and the rest brings the debt down. The next month the interest is lower, because you owe less. The last payment is only what's left. Argentina's central bank sets it as a rule: interest can only be charged on the outstanding balances of principal actually lent.

An example in Colombian pesos: you owe 1,000,000 at 2% a month and pay 100,000 a month. In the first month the interest is 20,000 and you're left owing 920,000; in the second, 18,400, leaving 838,400. By month 12 only 27,032 is left, and that's the last payment. In total you pay 127,032 in interest.

If the rate is written as an effective annual rate, the calculator turns it into a monthly one before it starts; if it's nominal annual, it divides it by 12. In Argentina, type the TNA and choose “Nominal annual”: it's the rate your bank applies each month, the TNA divided by 12. With the TEA from your statement, the interest would come out a few pesos higher.

Sources for this part:Banco Central de la República Argentina

What this calculator leaves out

The credit card minimum payment. Type what you'll pay as a fixed amount each month. If you pay only the minimum, the minimum shrinks with the balance and the debt lasts much longer. In the United States, Regulation Z requires card statements to warn about it: paying only the minimum means more interest and a longer time to pay off the balance.

Insurance, card fees and commissions. If your lender charges a monthly fee or insurance, subtract it from what you pay: only interest and principal count here. Argentina's central bank, for instance, counts insurance premiums and card fees in the total financial cost, not in the rate.

Taxes on interest. If your country charges VAT on interest (in Argentina, for end consumers), the real interest is higher.

Daily interest: these you can calculate. Some US credit cards charge interest with a daily rate: the APR divided by 360 or 365, depending on the issuer, as the Consumer Financial Protection Bureau explains. For those, choose “Card APR with a daily rate” and the divisor in your contract.

Sources for this part:Consumer Financial Protection Bureau, Banco Central de la República Argentina, Consumer Financial Protection Bureau

Extra payments: a shorter term or a lower payment?

The figures with an extra assume the payment stays the same and the debt ends sooner. An example in Colombian pesos: you owe 2,000,000 at 2.5% a month and pay 200,000. You finish in 12 months and pay 330,667 in interest. If you add a lump sum of 500,000 to your next payment, you finish in 9 months and pay 197,621: you save 133,046 and 3 months. If you instead add 50,000 to every payment, you finish in 10 months and save 71,345.

Keeping the same payment doesn't happen on its own everywhere, so say what you want when you pay extra. In Colombia, Law 1555 of 2012 says it's the borrower's right to decide whether a partial prepayment shortens the term or lowers the payment. The law covers loans of up to 880 monthly minimum wages and doesn't apply to mortgages. In Peru, a payment of up to two installments (counting the one due that month) is taken as paying installments in advance: it doesn't lower the interest unless you ask, before or when paying, for it to be applied as a prepayment. A payment of more than two installments is a prepayment and, if you don't choose, lenders must reduce the number of installments, according to the banking regulator (SBS).

In Mexico it's the other way around: if the payment doesn't settle the loan, the bank must lower the remaining payments unless you agree with it to reduce the number of payments instead (Bank of Mexico, Circular 16/2007). There the savings come out smaller than here, unless you ask for a shorter term. For it to count as a prepayment, ask for it and pay at least one installment's worth; otherwise the bank may apply it to your next payments.

Sources for this part:Función Pública, Gestor Normativo, Superintendencia de Banca, Seguros y AFP (SBS), Banco de México

If it's a credit card

Type the balance on your latest statement and a fixed payment, not the minimum. The calculator assumes you make no new purchases on that card while you pay it off: every purchase stretches the math.

In Brazil, revolving credit can only last until the next bill. After that, the bank offers an installment plan with its own rate and its own payments: use those numbers (CMN Resolution 4,549, art. 1).

And if it's revolving credit or a bill installment plan, the law doesn't let interest and charges exceed the original amount of the debt (Law 14,690/2023, art. 28, § 1). That amount isn't today's balance, so the calculator doesn't cut anything off: if the interest it works out is more than what you owe, it tells you. Your bill shows the original amount and how much has already been charged (CMN Resolution 4,549, art. 2-B).

Sources for this part:Banco Central do Brasil, Câmara dos Deputados

Keep track of it in Oslo

In Oslo you add each debt with what you owe, its rate and its payment. Every time you log a payment, the debt's bar shows how much you've paid, and with a payment day set it reminds you before each due date.