1. What is the Credit Card Payoff Formula?

The credit card payoff formula calculates how long it will take to pay off a credit card balance given a fixed monthly payment and interest rate. It accounts for compound interest and helps borrowers understand their repayment timeline.

2. How Does the Calculator Work?

The calculator uses the credit card payoff formula:

Where:

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

Explanation: The formula calculates the number of months required to pay off a credit card balance with fixed monthly payments, considering compound interest.

3. Importance of Payoff Calculation

Details: Understanding your payoff timeline helps with financial planning, debt management, and evaluating the true cost of credit card debt.

4. Using the Calculator

Tips: Enter your current credit card balance in INR, your planned monthly payment in INR, and the annual interest rate percentage. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What if my payment is too low to pay off the balance?
A: The calculator will show "∞" if your payment is less than the monthly interest charges, meaning you'll never pay off the balance.

Q2: Does this account for minimum payments?
A: No, this assumes fixed payments. Minimum payments typically extend payoff time significantly.

Q3: How accurate is this calculation?
A: It's mathematically precise for fixed payments and rates, but actual results may vary if rates change or payments fluctuate.

Q4: Should I include new purchases in the principal?
A: For accurate results, use only the current balance you want to pay off and avoid new purchases.

Q5: How can I pay off my card faster?
A: Increase monthly payments, make biweekly payments, or transfer to a lower-interest card.