Debt and credit calculators

Every fixed rate loan uses the same formula, so this covers personal loans, car loans, home equity and anything else with a set term. Interest is charged on the balance that is left, which is why the first years are mostly interest and the last years are mostly principal. Extra payments go straight to principal, which is why a modest amount added early cuts years off the end.

The minimum payment is built so the balance barely moves. Issuers ask for the greater of a flat floor, usually $25 to $40, or roughly 1% of what you owe plus that month's interest and fees. The interest part cancels out, so the balance falls by about 1% a month and the tail runs for twenty years on a card that took an afternoon to fill. Paying a fixed amount instead of a shrinking minimum is the single change that ends it fastest.

Both methods pay every minimum and throw all spare cash at one debt at a time. The avalanche targets the highest rate first, which is mathematically optimal. The snowball targets the smallest balance first, which clears accounts sooner and gives you visible wins. Research on real borrowers found that the people who close accounts fastest are the most likely to finish at all, which is the case for the snowball. The gap in interest below is what that motivation costs.

The rough test lenders and advisers use is that total student debt should stay below one year of expected starting salary. That is often quoted as keeping the payment near 10% of gross pay, which has not been true for years: at current federal rates one year of salary in debt takes roughly 12% to 14% of gross pay over ten years, and 10% is closer to three quarters of a year's salary. There is no single standard term any more either. Loans first disbursed on or after 1 July 2026 fall under the One Big Beautiful Bill Act, which sets a standard term of 10 to 25 years depending on the balance, or the Repayment Assistance Plan at 1% to 10% of adjusted gross income with forgiveness after 30 years. Federal loans carry protections private loans do not, so refinancing federal debt privately for a lower rate gives those up permanently.

Lenders measure your monthly debt payments against your gross monthly income, before tax. The front end ratio counts housing alone, the back end counts every required payment. Conventional underwriting looks for roughly 28% front end and 36% back end. The 43% qualified mortgage ceiling people still quote is gone: the CFPB replaced it with a price based test in its December 2020 rule, mandatory from October 2022. In practice Fannie Mae's automated underwriting approves up to 50%, and FHA with an automated approval goes to about 57%. Spending you are not contractually obliged to make, like groceries or subscriptions, is not counted at all.

Utilization is the second largest input to a FICO score after payment history, and scoring models look at each card on its own as well as at the total. One card at 90% is a problem even when the overall figure looks calm. The number carries no memory: it is recalculated from whatever balance your issuer reports, which is normally the statement balance rather than what you owe today, so paying the card down before the statement closes changes what gets reported. That also means a high month leaves no trace once the next statement is filed. What this leaves out is the score itself. Utilization is roughly 30% of a FICO score and the rest of the file, payment history in particular, is not modelled here.

A balance transfer buys time, not forgiveness. You pay a fee up front, usually 3% to 5% of the balance, and in exchange the interest stops for the promotional months. The arithmetic only works if you keep paying at least as much as you were paying before, because the whole saving comes from payments landing on principal instead of interest. Anything still owed when the promotion ends starts accruing at the go-to rate, which is often higher than the card you left. This assumes the payment stays level, that you are approved for a limit large enough to take the whole balance, which is not guaranteed, and that you put nothing new on either card. New purchases on a transfer card are usually not covered by the promotional rate.

Consolidation does not reduce what you owe. It replaces several revolving balances with one installment loan, which helps in two specific ways: the rate is usually lower than a card's, and the term is fixed, so the debt has an end date instead of drifting. It hurts in one specific way, which is that the origination fee is real money and is normally taken out of the loan, so you have to borrow more than you owe. The comparison below assumes you keep paying the same debts on their current schedule otherwise, and that the cards stay at zero afterwards. That last assumption is where most consolidations fail: the balances come back and the loan is still there. Your credit score, which decides whether you get the rate you entered, is not modelled.

A payday lender quotes a fee, not a rate, which is what makes the price hard to see. The conversion is simple arithmetic: the fee is a percentage of what you borrowed, and a fourteen day loan repeats about twenty six times in a year, so the annual rate is the fee percentage multiplied by twenty six. A fee of $15 on $100 for fourteen days is 391% APR. The Military Lending Act caps consumer credit to active duty service members at 36% including fees, and around twenty states apply a similar cap to everyone, which is why these loans are not available everywhere. What this leaves out is the part that does the damage: most of these loans are not repaid on the first due date, and the rollover schedule below assumes you pay only the fee each time, so the principal never moves. Bank overdraft fees and pawn loans work the same way and can price higher.

A pay in four plan splits a purchase into equal installments with the first taken at checkout, so the money at risk is on average half the purchase price for about six weeks. That is why a single late fee prices so much higher than it looks: a small fee on a small balance over a short window annualizes steeply. The real problem these plans create is not one purchase, it is several running at once with different due dates, which is why the total across plans matters more than any single schedule. Some providers report these plans to the credit bureaus and some do not, so the effect on a credit file depends on the lender. This models the fees only. It does not model an overdraft charge from your bank if the automatic payment lands on an empty account, which is the more common way this gets expensive.

A quoted rate is not a price. Fees change what you actually receive while the payment is set on the full amount, which is why the effective APR below can sit well above the number on the offer sheet, and it is the only figure that compares two loans fairly. Term length is the other trap: a longer loan almost always has the lower monthly payment and almost always costs more in total, so a comparison that stops at the payment picks the wrong loan nearly every time. When the two terms differ, read the effective APR for the price of the money and the total cost for what it takes out of your pocket. Neither of those covers a prepayment penalty, a required insurance product, or what the lender does with a late payment, and all three belong in the decision.

Every payment on a fixed rate loan is the same size, but its split is not. Interest is charged on the balance that is left, so early payments are mostly interest and late ones are mostly principal, and on a 30 year mortgage the crossover comes years in. That is what makes early extra payments so effective and late ones so ordinary. The schedule assumes the rate never changes and every payment arrives on time, which makes it exact for a fixed rate loan and only indicative for an adjustable one. It also covers principal and interest only. Escrow for property tax and insurance, and any mortgage insurance premium, are real money leaving your account each month and are not in these rows.