Our debt paydown calculator creates a realistic debt payoff plan for you. We use the information you provide about each of your debts plus your current budget for monthly payments to drive accurate results. Enter up to six different debts, and we’ll design a personalized payoff plan, including a visual timeline of your debt payoff schedule, the amount of interest you’ll pay over time, and your debt-free date based on two different strategies.

Components of Monarch’s debt payoff calculator

• Loan name: The term you use to identify each of your debts, whether by lender name, type of debt, or a nickname you use. This field helps you keep track of what’s what.
• Current balance: The total amount you owe your lender through today’s date. This includes all posted debts and can change daily, depending on your activity. According to the Consumer Financial Protection Bureau, your current balance may not reflect how much you still owe from your outstanding balance. To make sure your Current Balance entry is up to date, refer to your most recent statement.
• Minimum payment: The lowest amount you can pay on loan each month. Making minimum payments is how you avoid late fees and keep your account in good standing. To make sure your Minimum Payment entry is up to date, refer to your most recent statement.
• Interest rate: The cost you pay your lender for borrowing money on top of your minimum payment. Interest rates are determined by a number of factors, including the Federal Reserve and your credit score. The higher the interest rate, the more you’ll pay over the life of your loan. To make sure your Interest Rate entry is up to date, refer to your most recent statement.
• Total monthly debt budget: The full monthly amount of money you set aside in your budget for debt repayment. This amount must cover your total monthly minimum payments to avoid late fees and keep your account in good standing. We recommend that your Total Monthly Debt Budget amount covers more than the minimum on each of your debts whenever possible. You’ll save interest with extra payments above the minimum over the life of your loan.

Our debt repayment calculator uses the same proven debt paydown methods that our financial experts recommend. The main difference between these two is whether you prioritize interest rates or balances.

Avalanche method

The debt avalanche method is a loan payoff strategy that prioritizes your debt from highest to lowest interest rate. (At Monarch, we consider debts with high rates as anything at 7% and above.)

Paying your debts in this order sets you up to save as much as possible on interest. But tackling your most expensive debt first can be intimidating. It also may take a while to pay off in full before moving on to the next.

How Monarch’s debt avalanche calculator works:

• The debts you provided will be prioritized from highest to lowest interest rate.
• We’ll generate a debt-elimination timeline based on your current monthly payoff budget for the debt with the highest interest rate.
• You can adjust your monthly payoff budget to see how paying more above the minimum will impact your timeline.

Putting the avalanche method into action:

1. Pay the maximum that you budgeted for your debt with the highest interest rate.
2. Make minimum payments on the rest of your debts.
3. Continue this until you’ve eliminated the debt with the highest interest rate.
4. Identify your next debt with the highest interest rate and pay the exact same amount as you did before. This is what creates the “avalanche” effect on your remaining debts.
5. Remember to keep making minimum payments on your remaining debts.

Snowball method

The debt snowball method is a loan payoff strategy that prioritizes your debt from lowest to highest balances.

Knocking out smaller debts right away is all about getting quick wins. As you zero out your most manageable balances, you’ll find more wiggle room in your budget to put toward bigger and bigger. Even though this method helps you gain momentum right away, you’ll end up paying more interest over time.

How Monarch’s debt snowball calculator works:

• The debts you provided will be ordered from lowest to highest balance.
• We’ll generate a debt-elimination timeline based on your current monthly payoff budget for the debt with the lowest balance.
• You can adjust your monthly payoff budget to see how paying more above the minimum will impact your timeline.

Putting the snowball method into action:

1. Pay the maximum that you budgeted for your debt with the lowest balance.
2. Make minimum payments on the rest of your debts.
3. Continue this until you’ve eliminated the debt with the lowest balance.
4. Identify your next debt with the lowest balance and pay the exact same amount as you did before. This way you're able to put more money toward larger balances, which has a “snowball” effect on your remaining debts.
5. Remember to keep making minimum payments on your remaining debts.

Both methods have pros and cons:

• Paying off high interest first using the debt avalanche method requires a larger amount of money to get started. It could be better to use if your debts have interest rates at 7% or higher. Another reason it could be better is if you’re motivated by paying as little interest as possible. This method doesn’t offer quick wins, but it does set you up for savings down the line to use toward other goals. Paying off high-interest debt first is also one of the best money goals for couples who want long-term security and stability.
• Paying off a small balance first using the debt snowball method is a more approachable way to begin eliminating debt. It could be better to use if you want to see consistent progress, especially at the start. This method also can offer a more emotional vs mathematical payoff. While you will pay more interest over time, it could be better to prioritize small wins to boost your financial confidence and keep you motivated to pay off your remaining debts.

Ultimately, it’s better to choose the debt paydown method that suits your situation. Along with the amounts you owe, their interest rates, and other financial information, the National Foundation for Credit Counseling also recommends considering your financial personality.

Our debt payoff calculator creates a debt management plan that you can realistically execute now. But debt is only one part of your financial picture. To make meaningful progress with your debt-free goal, you also need a clear view of your whole financial picture.

Without it, you can’t be sure that you’re doing the most to get out of debt, and get out fast. Monarch brings together all of your accounts in one place. Members see a live feed of their money in action so they always know where it is and where it’s going. Here are five ways Monarch can give you the certainty that you’re tracking, budgeting, and optimizing your debt management plan without neglecting other goals.

1. Turn your debt management plan into an actionable goal: Monarch uses your real data to model different approaches for paying off debt without overextending your budget, like whether one-time or additional monthly payments are right for you. We auto-calculate exact monthly contributions for the rest of your financial goals too.
2. Stay focused on your progress across all priorities: Get a central view of all your goals with current status, progress, and monthly contribution requirements. Here you’ll always see whether you’re On track, Ahead of track, or At risk, you don’t have to guess. To adjust a priority, simply reorder what goal comes first, leave it to us to recalculate your timeline and status.
3. Feel in control of budgeting for debt payoff: Track and organize your debt contributions in your budget alongside your day-to-day transactions. Adjust your monthly planned contributions for a specific month, recurring deposits, or after any notable changes in your finances.
4. Follow real-time updates to your payoff date: Whenever you change contribution amounts, target dates, or target amounts, Monarch immediately shows how it impacts your timeline and status so you’re never working with outdated information.
5. Compare tradeoffs with wisdom-backed AI: Monarch’s Assistant learned from a credentialed panel of financial pros to respond with guidance tailored to your actual financial picture. Not ready to chat about your debt? Skim a weekly summary highlighting changes and what deserves your attention next.

How accurate is a debt payoff calculator?
It reflects the information you provided it. Check that you have access to your most up-to-date statements.

Does a debt payoff calculator work for multiple debts?
Yes. You can add up to six debts in Monarch’s debt payoff calculator. 

Which is better, debt snowball or avalanche?
If you have debts with high interest rates (7% and above), the debt avalanche method may be better for you. It prioritizes debts from highest to lowest interest rate to save you as much as possible on interest. However, it may take longer to see progress.

If you want to quickly eliminate full balances, the debt snowball method may be better for you. It prioritizes debts from lowest to highest balance so you can see progress from the start. However, you will pay more interest over time.

Can this calculator tell me how much extra to pay each month to be debt free by a certain date?
No. Only Monarch members have access to a debt calculator that uses historical data from your accounts to auto-calculate the exact amount of monthly contributions for all of your pay-down goals and save-up goals.