Debt Paydown Calculator
Take control of your debt repayment journey
Add your debts and see how they will be paid down over time. Compare different repayment strategies (Snowball vs Avalanche) and see the impact of different interest rates on your journey to becoming debt-free.
Our calculator helps you visualize your debt repayment timeline and choose the strategy that works best for your financial situation.
Total Overview
Total Debt
£0
Monthly Payment
£0.00
Total Interest
£0
Debt-Free Date
Invalid Date
Your Debts
Payment Breakdown
Strategy Comparison
🔺 Avalanche Method
Highest interest first - saves most money
❄️ Snowball Method
Smallest balance first - more motivation
Debt Paydown Timeline
💡 Debt Management Tips
🎯 Getting Started
- • List all debts with rates
- • Create monthly budget
- • Consider consolidation
- • Build emergency fund
📈 Staying on Track
- • Automatic payments
- • Track progress regularly
- • Celebrate milestones
- • Avoid new debt
💰 Saving Money
- • Find lower interest rates
- • Make extra payments
- • Balance transfer offers
- • Negotiate with creditors
🤝 Getting Help
- • Debt counseling
- • Management plans
- • Relief options
- • Financial advice
📚 How It Works
This calculator helps you understand your debt situation and plan your repayment strategy:
- Add each debt with amount, interest rate, and term
- Choose a repayment strategy (Avalanche or Snowball)
- View total monthly payments and interest costs
- See your estimated debt-free date
- Compare strategies to find what works best
⚠️ Note: This calculator provides estimates based on your inputs. Actual results may vary based on your specific situation and lender terms.
❓ Frequently Asked Questions
What is the debt snowball vs debt avalanche method?
The debt snowball method pays off debts from smallest to largest balance, regardless of interest rate. This builds motivation through quick wins. The debt avalanche method pays off debts from highest to lowest interest rate, saving more money overall. For example, with debts of £2,000 at 8%, £5,000 at 15%, and £10,000 at 5%: snowball pays the £2,000 first; avalanche pays the £5,000 (15%) first. Avalanche typically saves £hundreds to £thousands in interest, but snowball provides psychological wins that help some people stick with debt payoff.
How can I pay off debt faster?
Pay off debt faster by: 1) Making extra payments toward principal (even £50/month helps significantly), 2) Using windfalls (bonuses, tax refunds) for debt, 3) Refinancing high-interest debt to lower rates, 4) Side hustles to generate extra income, 5) Balance transfer to 0% credit cards (watch for fees), 6) Debt consolidation loans at lower rates, 7) Cutting expenses and redirecting to debt, 8) The avalanche method to minimize interest. Even doubling your minimum payment can cut repayment time in half on high-interest debt.
Should I save money or pay off debt first?
Build a small emergency fund first (£500-£1,000), then aggressively pay high-interest debt (credit cards, payday loans above 10%). After high-interest debt is gone, balance debt payoff with building a larger emergency fund (3-6 months expenses). For low-interest debt (mortgages, student loans below 5%), you can prioritize saving/investing simultaneously. The rule: pay off any debt with interest above 5-6% before investing, but always maintain an emergency fund. Without savings, you'll use credit cards for emergencies, undoing progress.
What is debt consolidation and should I do it?
Debt consolidation combines multiple debts into one loan, ideally at a lower interest rate. For example, consolidating £15,000 in credit cards averaging 20% APR into a 9% personal loan saves thousands in interest and simplifies payments. Benefits: lower interest, one payment, fixed repayment date. Risks: fees (2-5%), longer term may cost more overall, doesn't address spending habits. Only consolidate if: 1) New rate is significantly lower, 2) You won't rack up new credit card debt, 3) You understand total cost including fees. Shop around for best rates - banks, credit unions, and peer-to-peer lenders.
How much debt is too much?
A good rule: total debt payments (excluding mortgage) shouldn't exceed 15-20% of your monthly income. If you earn £3,000/month, debt payments over £450-£600 indicate trouble. Warning signs: paying only minimums, using credit for necessities, maxed out cards, unable to save, stressed about money, considering payday loans. Your debt-to-income ratio matters for mortgages - lenders typically want total debt (including mortgage) below 43% of income. If debt feels overwhelming or you can't make progress on principal, seek help from debt charities like StepChange or Citizens Advice.
What happens if I can't pay my debts?
If struggling with debt: 1) Contact lenders immediately - many offer hardship programs, 2) Seek free advice from StepChange, National Debtline, or Citizens Advice, 3) Consider formal solutions: Debt Management Plan (DMP), Individual Voluntary Arrangement (IVA), Debt Relief Order (DRO), or bankruptcy. Don't ignore debts - interest and fees accumulate, creditors may take legal action. Most creditors prefer working with you over court action. Free debt charities can negotiate on your behalf. Avoid fee-charging debt management companies - free help is available. Your credit score will be affected but recovery is possible.
How does credit card minimum payment work?
Credit card minimum payments are typically 1-3% of your balance or £5-£25, whichever is higher. This is designed to keep you in debt longer. Example: £3,000 at 18% APR with 2.5% minimum payment takes 17 years to pay off, costing £3,750 in interest. Paying £100/month instead clears it in 3.5 years, costing £656 in interest - saving £3,094 and 13.5 years! Always pay more than the minimum. Even £20 extra per month makes a huge difference. Aim to pay the full balance monthly or at least 3-5% to make real progress.
Can I negotiate with creditors to reduce my debt?
Yes, creditors often accept reduced settlements, especially if you're struggling. For debts in collections or approaching default, you might negotiate 40-60% settlements. Before negotiating: 1) Understand your full financial situation, 2) Know your legal rights, 3) Get advice from free debt charities, 4) Have a lump sum available (settlements usually require immediate payment), 5) Get agreements in writing. Creditors may freeze interest, accept lower payments, or settle for less rather than risk getting nothing in bankruptcy. Your credit score will be affected, but it recovers over time. Never agree to unrealistic payment plans.
Should I use my savings to pay off debt?
Generally yes for high-interest debt (above 5-6%), but keep £500-£1,000 emergency fund. If you have £5,000 savings earning 4% and £5,000 credit card debt at 20%, paying off the debt saves you net 16% (£800/year). However, never completely drain savings - you need emergency funds to avoid using credit cards for unexpected expenses. Consider a middle ground: use half your savings for debt, keep half for emergencies. Exception: if you have low-interest debt (mortgage at 3%), keep savings in higher-yield investments or ISAs.
How long will it take to pay off my debt?
This depends on your balance, interest rate, and monthly payment. Use our debt calculator for your specific situation. General examples at 18% APR: £2,000 with £50/month takes 5.5 years (£1,243 interest); £100/month takes 2 years (£370 interest). £5,000 with £100/month takes 7.5 years (£3,772 interest); £200/month takes 3 years (£1,054 interest). Key insight: doubling your payment more than halves your payoff time and cuts interest by 60-70%. Even small increases make huge differences - an extra £25/month on a £3,000 balance saves years and hundreds in interest.