How is debt repayment time calculated?

Debt repayment time is calculated using the standard loan amortisation formula. Interest is charged monthly on the remaining balance at the annual rate divided by 12. Each payment first covers that month's interest, with the remainder reducing the principal. The number of months is n = -log(1 - (r * P / A)) / log(1 + r), where P is the balance, r is the monthly interest rate, and A is the monthly payment. If your payment does not exceed the first month's interest charge, the debt will never be paid off and the balance will grow instead.

Should I pay more than the minimum on my debt?

Paying more than the minimum reduces both the time to clear the debt and the total interest paid, because less of each extra dollar goes to interest and more reduces the principal balance that future interest is calculated on. Even a modest increase in your monthly payment can cut years off a high-interest debt like a credit card or personal loan. Use this calculator to compare different payment amounts and see the effect on payoff time and total interest.

What if I have more than one debt?

This calculator handles one debt at a time. If you have several debts (credit cards, personal loans, store cards), use the debt snowball calculator to pay off the smallest balance first, or the debt avalanche calculator to target the highest interest rate first. Both approaches keep making minimum payments on every other debt while directing extra repayment capacity at one debt until it is cleared, then rolling that payment onto the next.

Debt Repayment Calculator

This calculator works out how long it will take to clear a single debt - a credit card, personal loan, overdraft or store card - based on the balance you owe, the interest rate charged and the monthly payment you plan to make. Debt charged interest on a reducing balance can be deceptively slow to shift if your payment barely covers the interest each month, so seeing the real payoff time upfront helps you set a realistic plan. You enter your current balance, the annual interest rate (APR), your planned monthly payment, and an optional lump sum you can put towards the debt today. The calculator returns your time to pay off, the total interest paid over the life of the debt, the total amount repaid, and an estimated payoff date. It also breaks down the first month's interest and principal split, shows what share of your total repayment goes to interest, and compares payoff time and total interest across a range of monthly payments, so you can see how much faster extra repayments clear the debt. Use it to test how a bigger payment or a lump sum today shortens the payoff time, or to check whether your current payment even covers the interest being charged. Rates and terms vary between lenders, so treat the results as an indicative estimate rather than an exact figure from your provider.

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Updated April 2026 Standard reducing-balance amortisation formula, monthly compounding.

1. Your Debt

Current balance owing

Annual interest rate (APR, e.g. credit card ~21%)

2. Your Repayment Plan

Monthly payment you can make

Extra one-off lump sum today (optional)

Your Repayment Summary

Time to Pay Off
-
At your monthly payment

Total Interest Paid

Over the life of the debt

Total Repaid

Balance plus interest

Estimated Payoff Date

From today

Payoff Time at Different Monthly Payments

Monthly Payment	Time to Pay Off	Total Interest	Total Repaid

Repayment Breakdown

Starting balance-

Lump sum applied today-

Balance after lump sum-

Annual interest rate-

Monthly interest rate-

Monthly payment-

Number of payments-

Total repaid-

Interest vs Principal

First month interest charge-

First month principal reduction-

Total interest paid-

Interest as % of total repaid-

Minimum viable payment-

Summary: Enter your debt details above.

How Debt Repayment Time Is Calculated

This calculator uses the standard reducing-balance amortisation formula that lenders use for credit cards, personal loans and overdrafts. Each month, interest is charged on the remaining balance at your annual rate divided by 12. Your payment first covers that month's interest, with whatever is left over reducing the principal. As the balance falls, less of each payment goes to interest and more goes to reducing what you owe, so payoff speeds up over time.

The number of months to clear the debt is calculated as:

n = -log(1 - (r × P / A)) / log(1 + r)

Where P is your starting balance, r is the monthly interest rate (annual rate divided by 12), and A is your monthly payment. If your monthly payment is less than or equal to the first month's interest charge, the balance will never reduce and the debt cannot be paid off at that payment level.

Why Extra Payments Make Such a Big Difference

Because interest is calculated on the reducing balance, extra payments compound in your favour. A higher monthly payment reduces the principal faster, which means less interest accrues the following month, which means even more of your next payment goes to principal. On a typical credit card balance at 20 percent or higher, increasing your payment by even $50 to $100 a month can cut years off the payoff time and save hundreds or thousands of dollars in interest.

Typical NZ Interest Rates by Debt Type

Debt Type	Typical Annual Rate
Credit card (standard)	19% to 23%
Credit card (low rate)	12% to 14%
Personal loan (unsecured)	10% to 20%
Personal loan (secured, e.g. car)	7% to 14%
Buy now, pay later / store card	20% to 26%
Overdraft	14% to 20%

Rates vary by lender and depend on your credit history. Check your loan or credit card statement for your actual current rate, as this calculator only produces an estimate based on the rate you enter.

Tips to Pay Off Debt Faster

Pay more than the minimum whenever you can, even small extra amounts help
Apply any lump sums (tax refund, bonus, savings) directly to the balance
Consider a balance transfer or consolidation loan if it lowers your interest rate
Stop adding new spending to the debt while you are paying it off
If you have several debts, use the debt avalanche method (highest rate first) or the debt snowball method (smallest balance first) to structure your overall plan

Related Calculators

Mortgage Calculators hub: all NZ mortgage and lending tools.
Debt Avalanche Calculator: pay off the highest interest rate debt first.
Debt Snowball Calculator: pay off the smallest balance first.
Credit Card Interest Calculator: interest charges on card balances.
Personal Loan Repayment Calculator: fixed-term loan repayments.
Credit Card Minimum Payment Trap Calculator: why minimum payments cost so much.

Sources: Standard reducing-balance loan amortisation formula, as used by NZ banks and lenders for credit cards and personal loans. Commerce Commission NZ, Responsible Lending Code guidance on consumer credit (comcom.govt.nz). Sorted.org.nz debt repayment guidance.

This calculator provides indicative estimates only, assuming a fixed interest rate charged monthly on the reducing balance and no additional fees, penalty interest, or changes to the rate. Actual repayment terms depend on your lender's terms and conditions. This is not financial advice. Speak to your lender or a financial mentor if you are struggling with debt.