Debt Repayment Calculator

This debt repayment calculator figures how much faster you will get out of debt and how how much interest you will save by adding an additional principal repayment to your next regularly scheduled payment.

If you have multiple debts to repay then try this Debt Snowball Calculator to repay faster using the rollover method. In addition, there are 10 other credit card and debt calculators here to choose from. One will certainly fit your debt repayment needs perfectly.

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How Much Time And Money Will You Save By Adding An Additional One-Time Payment?

Feel like you're repaying your debts just fine? Think you “have it together?”

Watch out. You might be in for years and years of interest payments – unnecessary payments if you have the means to pay a large, one-time lump sum.

Related: 5 Rookie Financial Planning Mistakes That Cost You Big-Time (and what to do instead!) Explained in 5 Free Video Lessons

Using our Debt Repayment Calculator, run a scenario where you sell a car to put the money toward debt, forgo an expensive vacation for the dream of becoming debt-free, or use some inheritance money to wipe out those student loans. Whatever your scenario, let the Debt Repayment Calculator show you how much time and money you can save thus spurring you to action!

Repay Debts Or Invest?

What's more important: Paying off loans or investing? The issue depends on your financial situation and several factors.

Some people want to do both at the same time. Others demand paying off debts as a first priority. However, you should assess your situation so that you can make the most appropriate decision based on the information you have. Consider the following:

If you have debts and investments, are you paying more interest on your debts than you’re making on your investments? Invest only when you can reasonably expect returns that significantly exceed the interest on your debts; otherwise, you would be better off repaying your debts before investing.

Are there any risks involved? Which of the two gives you greater risk – your debts or investments? If the investment doesn't go well, you may find yourself miserably paying off the debts while having little or nothing to show for your “savings.”

Are you figuring in matches? If you are receiving a match (for example, through an employer-based 401k), it might be more attractive to pay into your retirement account knowing you'll at least make a 100% return – more than you'd save by putting that money toward debt.

What if you lose your job next month? Do you have an emergency fund to support your household needs if you temporarily lose your income? Many experts recommend that you save enough to cover at least three months of your household expenses. Of course, depending on your personal preference or financial situation, this calculation may be adjusted.

Don’t just focus on the numbers. You should also take into consideration the psychological effects of your decision. Which option are you more motivated to undertake? What are the psychological benefits of being debt-free? Think through these factors before moving forward.

How To Make A Lump Sum Payment

Start by making a list of items you can sell to gather the cash you need for a lump sum payment. Items might include:

Vehicles
Rental homes
Jewelry
Computers
Smartphones
Property
Tools and equipment
Art and antiques

You can also forgo future spending on events and services such as:

Vacations
Expensive cellular service
Dining out
Entertainment venues

Finally, consider seeking an extra job or a pay raise to be able to throw extra money at debt.

After you've completed your list of items, dedicate your earnings and savings to making lump sum payments toward your debt. Our repayment calculator will help you see the results of one such payment – imagine if you paid extra every single month!

Early Lump Sum Repayments Make A Big Difference

If you've decided to work on paying off your debt, remember that early lump sum payments make a big difference. The less principal involved in a debt, the less interest you'll pay. By wiping out a big chunk of principal, your total interest savings will skyrocket because of the compound effect.

The sooner you put a lump sum repayment toward your principal, the better. Making a lump sum (or several lump sum) payments will decrease the amount of time you'll carry your debt – dramatically.

Try running your own numbers on this Debt Repayment Calculator so you can see the benefits of lump sum payments today!