This debt paydown calculator estimates how much interest you will save by adding a pay down payment to your next monthly payment on your loan, mortgage or credit card. There is in depth information on this topic below the tool.

Current debt balance owed:*
Annual interest rate:*
Current monthly payment value:*
Paydown amount to add next month:*

How does this debt paydown calculator work?

This financial application can help you approximate how much interest you can save by making a pay down to your debt within the next month. It can be simulate payments for any type of loan such as: credit card balance, student loan, auto loan, personal or mortgage loan. The following variables should be given:

  • Current debt balance owed (CDB) which is the principal left to be repaid.
  • Annual interest rate (r) which in the model is considered as an average yearly constant rate.

  • Current monthly payment (CMP) value which is the amount you pay monthly basis. Please consider that in order to simplify the mode assumes this regular payment is fixed.

  • Paydown amount to add next month is the sum of money you have available and pay down together with your regular payment.

The algorithm behind this debt paydown calculator is based on the formulas explained below:

Results compared

Without pay down

With pay down

Payments remaining



Monthly payments saved



Total paid



Total interest paid



Interest savings



Debt Paydown formula

Debt Pay down formula

B2= A1 – A2

C1 = A1 * CMP

C2 = A2 * CMP + PDA

D1 = C1 – CDB

D2 = C2 – CDB

E2 = D1 – D2

Apart from this tool you may also be interested in our debt reduction calculator that can help you perform more advanced calculations such as:

  • Finding when you will be debt free in case you decide to make extra payment regularly in smaller amounts and what are the savings in interest you can make this way;
  • Estimating what will be the required monthly payment level in case you decide a certain period of time in which you want to payoff entirely your debt.

Example of a calculation

Let’s assume an individual has a mortgage loan balance of $100,000. His existing monthly payment is $1000, while the yearly interest rate is 3.5%. What are the savings from interest not paid in case he decides to make a pay down next month of $10,000?

Results comparedWithout pay downWith pay down
Payments remaining 119 105
Monthly payments saved - $13.85
Total paid $118,403.36 $114,548.46
Total interest paid $18,403.36 $14,548.46
Interest savings - $3,854.90

25 Feb, 2015