Method
Debt payoff simulation
Used by Consolidate or pay faster?. The worked example is the same case our automated tests check on every release.
One month at a time
Each debt is handled the way a statement does it. Every month: interest is added, equal to the balance times the annual rate divided by twelve, rounded to the cent. Then the minimum payment is taken off, or the whole balance if that is smaller. Then any extra money goes to the target debt. When a debt reaches zero, its minimum payment joins the extra from the next month on, so the amount you pay each month never falls until you are done.
interest = balance × rate ÷ 12 balance = balance + interest − minimum − share of extra extra = extra + minimums of debts already paid off
Highest rate first or smallest balance first
Sending the extra to the highest rate first (often called the avalanche) always costs the least interest. Sending it to the smallest balance first (the snowball) clears a debt sooner, which some people find easier to stick with. The tool computes both from the same rules; it does not pick one for you.
Consolidation on equal cash
A consolidation loan is sized to pay off every listed balance. If it has a fee deducted from the proceeds it is grossed up, following the equal-cash method, so the cards and loans really reach zero. Its cost is total payments minus what you owed today, which counts interest and the fee together. A second column shows what happens if you take the loan but keep paying what you pay today, which isolates the rate from the longer term.
Minimums held fixed
You enter today's minimum for each debt and the simulation holds it there. Most card issuers recalculate the minimum as a percentage of the balance, so the real minimum-only path is slower and costlier than the one shown. That makes the tool's comparison conservative in the direction that matters: paying extra or consolidating looks a little less good than it really is against true minimums.
Worked example
Card A $6,500.00 at 24.99%, Card B $3,200.00 at 19.99%, Personal loan $8,000.00 at 14%: $17,700.00 in total. Extra $200.00 a month, highest rate first. Consolidation at 11.5% over 48 months with a 3% fee deducted.
| Pay minimums only | Pay $200.00 extra, highest rate first | Consolidate | Consolidate, keep paying $763.00 | |
|---|---|---|---|---|
| Monthly payment, first month | $563.00 | $763.00 | $476.06 | $763.00 |
| Months to debt-free | 45 | 29 | 48 | 28 |
| Total interest | $7,544.53 | $4,304.22 | $4,603.32 | $2,577.84 |
| Interest and fees, total cost | $7,544.53 | $4,304.22 | $5,150.74 | $3,125.26 |
Paying $200.00 extra a month, highest rate first, makes you debt-free in 29 months and costs $4,304.22 in interest, against 45 months and $7,544.53 paying minimums only. Consolidating at 11.5% over 48 months costs $5,150.74 in interest and fees, or $3,125.26 in 28 months if you keep paying $763.00 a month. On these numbers, "Consolidate, keep paying $763.00" costs the least.
Reviewed 5 September 2026. Corrections are dated on this page.