1. What is the Credit Card Payoff Calculator?

The Credit Card Payoff Calculator estimates how long it will take to pay off your credit card debt based on your current balance, monthly payment, and interest rate. It helps you plan your debt repayment strategy.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( P \) — Principal balance (Rs)
• \( D \) — Monthly payment (Rs)
• \( R \) — Monthly interest rate (annual rate / 12, as a decimal)
• \( T \) — Time to payoff (months)

Explanation: The formula calculates how many months it will take to pay off the debt assuming fixed monthly payments and constant interest rate.

3. Importance of Payoff Calculation

Details: Knowing your payoff timeline helps with financial planning, understanding the true cost of debt, and motivating debt repayment strategies.

4. Using the Calculator

Tips: Enter your current credit card balance, the fixed monthly payment you can afford, and your card's annual interest rate. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does my payment need to be higher than the monthly interest?
A: If your payment only covers the interest, you'll never pay down the principal. The payment must cover interest plus some principal reduction.

Q2: How can I pay off my debt faster?
A: Increase your monthly payment, reduce your interest rate (through balance transfers or negotiations), or both.

Q3: Does this account for minimum payments?
A: No, this assumes fixed payments. Minimum payments typically extend payoff time significantly.

Q4: What if I make additional payments?
A: Additional payments will reduce payoff time. Recalculate with your new payment amount.

Q5: Does this account for fees or changing rates?
A: No, this assumes a constant interest rate with no additional fees.