This debt payment calculator estimates how much from your monthly payment goes on interest and how much goes on principal to be repaid on matter of the debt/loan type you owe. There is more information on this topic below the tool.

Current debt balance owed:*
Annual interest rate:*
Current monthly payment value:*
Optional no. of monthly payments left:

How does this debt payment calculator work?

This financial tool can approximate the portion of the interest and the one for principal you pay on a monthly basis for your debts. No matter if it is a credit card balance, a mortgage loan, or a personal or student loan to be repaid, this debt payment calculator applies the same algorithm that takes account of 3 variables while applying the formulas provided below:

  • Current debt balance owed (CDB) – what is left to be paid as principal.

  • Annual interest rate (r) which in the model is considered as a fixed rate.

  • Current monthly payment (CMP) value which is how much you pay regularly today. Please note that the model assumes the existing regular payment is constant.

  • No. of monthly payments left (OMP) which is an optional information.

Formulas used:

- Interest portion from your current monthly payment - A = CDB * r/1200

- Principal portion from your current monthly payment - B = CMP - A

- Total paid - C = CMP * OMP

- Total interest paid - D = C - CDB

The tool is used to determine how much does your debt cost you in interest, and so may help you see whether you shouldn’t think of paying entirely your debts by a onetime transaction or paying earlier by extra payments just to be debt free as soon as possible.

Example of a calculation

Let’s assume an individual has to pay a current balance of $50,000 for an auto loan taken in the past. His monthly payment is $800, while the yearly interest rate is 5% and the no. of payments left is 120:

Principal portion from your current monthly payment = $591.67

Interest portion from your current monthly payment = $208.33

For the balance of $50,000.00 that you currently owe, you will pay in total an amount of $80,000.00, while the total interest paid is $30,000.00

24 Feb, 2015