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I decided to use Money’s Debt Planner tool to see how long it would take to pay off two debts:
- My car loan has a balance of $ 6250 and has an interest rate of 13.75%.
- Medical bills that were supposed to be covered by insurance (long story) but now are $350 with a 20% interest rate.
I looked at all three of their options: pay by a certain date, pay a set amount per month, and pay the minimum balances.
How Quickly Can You Pay off Your Credit Card Debt?
Here are the results I got for paying it off in 2 years:
| If you pay $309.40 a month, it will take you 2 years to pay off your credit cards. | |
| Based on your current combined balance of $6,550.00, you will pay a total of $895.51 in interest. |
Here are the results of the $350/month plan:
| If you pay $350.00 a month, it will take you 1 year and 9 months to pay off your credit cards. | |
| Based on your current combined balance of $6,550.00, you will pay a total of $771.88 in interest. |
Finally, here are the results if I only pay the minimum balances:
| By making minimum payments only, it will take you 10 years and 3 months to pay off your credit cards. | |
| Based on your current combined balance of $6,550.00, you will pay a total of $2,504.66 in interest. |
Just looking at that I realize that I have got to be more aggressive about paying these off as soon as possible. Try using that calculator and notice the huge difference between the payment plans for yourself.
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