Credit card payoff calculator helps you understand how long it would take to repay your credit card bills through a fixed monthly payment plan. It’s a type of credit card interest calculator that gives you a credit card amortization table wherein you can get payment related details. You can find out how much interest and the principal amount you have to pay every month. This calculator (also known as credit card amortization calculator) determines the overall interest you have to pay on the balance.
How does this credit card interest calculator work?
Our credit card payoff calculator works on the basic principle of amortization. Let us look at the example:
Suppose, the current balance on your credit card is $1000.
The interest rate is $36%
Your monthly payment amount is $100
Usually, the credit card interest rate is calculated on a monthly basis. In this case, your monthly interest rate is =36/12% =3% (0.03). This is your monthly interest. It’s added to your credit card bill every month.
The interest rate in your first month is $1000 *0.03 = $30
The amount you have to pay in the first month – Principal + interest = $1000+ $30 = $1030.
Your principal payment in the first month = Your monthly payment – interest = $100 – $30 = $70.
Your new balance is $1030 – $100 = $930.
How does the credit card amortization schedule help you?
You can decide the rate at which you can cut down your balance and make sure you have money for the next payment every month.
When you’re able to cut down your balance, the minimum amount due also decreases. This helps to reduce your financial burden.
You can plan for paying off your credit card debts quickly.
Few terms related to this calculator:
- Credit card amortization: It is the process of spreading out your balance into a series of fixed payments every month.
- Credit card interest: This is the amount you have to pay for borrowing money.
- Principal: This is the amount you borrowed, excluding the interest.
Disclaimer: Our online credit card payoff calculator is a DIY financial tool. We can’t guarantee the accuracy of the calculator because the figures are likely to change as per your situation. Also, our credit card payoff schedule doesn’t include credit card insurance and other fees.