Minimum Payment Calculator
See just how long it takes — and how much it costs — to pay off a balance at the minimum payment.
Your Details
Principal vs. Interest
What you'll actually pay in total
- Principal$4.0K
- Interest$3.3K
Payoff Time by Monthly Payment
How faster payments shorten your timeline
Balance Over Time
How your balance declines as you pay it down
Principal vs. Interest by Year
How much of each year's payments go to interest
How It Works
- Enter your current balance and interest rate.
- Enter the amount you plan to pay each month.
- Press Calculate to see your payoff timeline.
Formula Used
Each month's interest is charged on the remaining balance, then the rest of the payment reduces principal.
Good to Know
- • Extra payments go straight to principal.
- • Higher-APR balances cost more the longer they carry.
Important Notes
- • Assumes a fixed payment and fixed rate.
- • If payment doesn't cover interest, balance won't shrink.
Why Minimum Payments Are Designed to Be Slow
Minimum payments are typically set low on purpose — often just 1–3% of the balance plus that month's interest — because it maximizes the interest the lender collects over time. Paying only the minimum can stretch a modest balance out over many years, as the payoff time above often demonstrates.
A Small Increase Changes the Math a Lot
Because minimum payments barely outpace interest early on, even a modest fixed increase — rounding up to a flat amount instead of a shrinking percentage — can cut years off the payoff time. Try raising the monthly payment field above and compare the new payoff time against the current one.
Terms to Get Familiar With
- Minimum payment formula — commonly the greater of a flat dollar amount or 1-3% of the balance, plus that month's interest.
- Interest-only trap — when the minimum payment barely exceeds interest, leaving the balance nearly flat for months.
Example, Step by Step: The Cost of Minimum-Only Payments
On a $4,000 balance at 22% APR with a $100/month minimum:
Principal reduction = $100 − $73 = $27
Payoff time at this pace: over 6 years (73 months), with total interest of roughly $3,276 — nearly as much as the original balance itself
Because so little of each minimum payment actually reduces principal early on, a balance paid only at the minimum can end up costing more in interest than the amount originally charged — a common, easy-to-miss consequence of minimum-payment-only strategies.
Minimum Payment Trap Table
$4,000 balance at 22% APR, $100/mo minimum:
| Payment | Payoff Time |
|---|---|
| $100/mo (minimum) | 73 months |
| $200/mo | 26 months |
Mistakes Worth Knowing About With Minimum-Only Payments
- Assuming the minimum is designed to pay off the balance quickly — it's often designed to maximize interest collected.
- Not rounding up to a flat higher amount — even a modest fixed increase meaningfully shortens payoff time.