1. What is the Monthly Payment Calculator?

This calculator determines the fixed monthly payment needed to pay off credit card debt within a specified timeframe, using the standard loan amortization formula as recommended by MoneySuperMarket.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( D \) — Monthly payment (GBP)
• \( P \) — Principal balance (GBP)
• \( R \) — Monthly interest rate (APR / 12, as decimal)
• \( N \) — Payoff period (months)

Explanation: The formula calculates the fixed payment needed each month to pay off the debt in exactly N months, accounting for compound interest.

3. Importance of Payment Calculation

Details: Knowing your required monthly payment helps with budgeting and debt repayment planning. It shows how payoff time affects monthly costs.

4. Using the Calculator

Tips: Enter your current credit card balance, the APR (annual percentage rate), and your desired payoff timeframe in months.

5. Frequently Asked Questions (FAQ)

Q1: Why does APR affect the payment so much?
A: Higher APRs mean more interest accumulates each month, requiring larger payments to pay down the principal.

Q2: What if I can't afford the calculated payment?
A: Try extending the payoff period or consider balance transfer options with lower interest rates.

Q3: Does this account for minimum payments?
A: No, this calculates fixed payments to pay off debt in your specified timeframe, which may be higher than minimum payments.

Q4: Are fees included in this calculation?
A: No, this only calculates interest. Additional fees would increase your total repayment amount.

Q5: How accurate is this calculator?
A: It provides mathematically exact payments for fixed-rate scenarios. Actual payments may vary with rate changes or fees.