DEBT

Calculate how long it will take to pay off your debt

April 5, 2024
3 min read

While some debt can be an essential part of building a strong financial future, no one likes having it hang over their head. Whether you owe on student loans or credit card debt, it can feel like those payments might never end. Calculate how long it will take you to pay off your debt, and you’ll have a clear finish line to work toward and keep you motivated.

Determine your current debt

Step one of paying down your debt is figuring out how much you have. If you haven’t already, create a list of what you owe. This could be in a spreadsheet, a notebook or your favorite note-taking app — whatever format works best for you.

Write down the total owed for each debt, your current balance and how much you’re paying each month. It’s helpful to include details like the annual percentage rate (APR), so you have everything in one place. You can use this method to continue to track monthly payments, too.

Debt payoff calculator

Once you have those numbers, it’s time for some math. To calculate how long it will take to pay off your debt you will need your:

balance owed
APR for each debt
expected monthly payment

Drop those numbers in the calculator below to find out how long it could take you to pay off your debt.

Debt payoff methods

Now that you have your finish line, figure out how you’re going to get there. While consistent monthly payments are all that’s needed, finding the right debt repayment approach for you and your financial goals can help to keep you on track.

Snowball

This approach to debt payment starts small to more quickly pay off your lowest balances. To try the snowball method , list your debts in order by amount. Make all your minimum payments on each of them every month. If you have any funds left over in your budget, put the extra toward your lowest balance.

Avalanche

This method is focused on reducing the total interest paid, which can be especially important if you’re racking up high-interest debt with credit cards. By paying the minimum balances on each debt and putting any extra income toward the balance with the highest interest rate, you can more efficiently eliminate bad debt . Once that’s paid off, you’ll direct those payments to the balance with the next-highest interest rate — and so on.

Calculate how long it will take you to pay off your debt, and you’ll have a clear finish line to work toward and keep you motivated.

Consider debt consolidation

If you’re struggling to manage a multitude of loans, debt consolidation may help by streamlining your payments. It also has the potential to decrease your interest rate, but be sure to check the terms of the lower rate. Although the monthly payment may end up being lower, it could mean you're paying back the debt over a longer period of time.

This approach also usually includes upfront fees that should factor into your decision.

Use buckets to boost debt payoff

The right tools can make all the difference in paying down debt. Tools that help you set aside money for debt payments can help you better manage those monthly expenses. With an Ally Bank Spending Account , you can set up spending buckets to organize your debt payments.

You can name your buckets after the debts you want to track, and decide how much money is needed for each. This will give you a snapshot of your debt payments all in one place, plus you'll know how much of your monthly income needs to go toward your debt.

You can pair your spending buckets with savings buckets in an Ally Bank Savings Account to help you set aside any additional funds for extra debt payments.

Determine your own debt destiny

Owing money can feel overwhelming at times. With a savings strategy that includes a personal timeline and consistent payments, you can take better control of what’s next and keep your debt in check.