1. What is the Minimum Repayment Calculator?

This calculator estimates how long it will take to pay off credit card debt making only the minimum payments each month. It shows the impact of interest charges on repayment time.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( P \) — Principal balance ($)
• \( MP \) — Minimum payment ($)
• \( R \) — Monthly interest rate (APR/12 as decimal)
• \( T \) — Time to pay off (months)

Explanation: The formula calculates how many months it would take to pay off the debt when making fixed minimum payments that include both principal and interest.

3. Importance of Understanding Minimum Payments

Details: Making only minimum payments can dramatically extend repayment time and increase total interest paid. This calculator helps visualize the true cost of minimum payments.

4. Using the Calculator

Tips: Enter your current credit card balance, the minimum payment amount (or percentage of balance), and your card's APR. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does it take so long to pay off with minimum payments?
A: Minimum payments are typically structured to cover mostly interest with only a small portion going toward principal, especially early in repayment.

Q2: What if my minimum payment is a percentage of balance?
A: Convert the percentage to a dollar amount based on your current balance (e.g., 2% of $1000 = $20 minimum payment).

Q3: How can I pay off my debt faster?
A: Pay more than the minimum whenever possible, even small additional amounts can significantly reduce repayment time.

Q4: Does this account for changing interest rates?
A: No, this assumes a fixed interest rate. If your APR changes, the actual repayment time may differ.

Q5: What if I make purchases while paying off?
A: This calculator assumes no additional charges. Adding new purchases will extend repayment time.