Debt Repayment Calculator

How Debt Repayment Works

When you owe money, interest is charged each month on the outstanding balance. Your monthly payment first covers that interest, and whatever is left reduces the capital you owe. Early on, a large share of each payment goes to interest; as the balance shrinks, more goes to capital and the debt clears faster. The higher the interest rate, the more of your payment is swallowed by interest rather than progress — which is why high-rate debt like credit cards and store accounts is the most urgent to clear.

The Formula (in Plain Terms)

The number of months to clear a debt is:

n = −ln( 1 − (B × i) ÷ PMT ) ÷ ln( 1 + i )

Where B is the balance, i is the monthly interest rate (annual ÷ 12), and PMT is your monthly payment. There's a catch built into the maths: if your payment is less than or equal to the monthly interest (B × i), the formula breaks down — because the balance never falls. That's the minimum-payment trap, and the calculator warns you when you hit it.

A Worked Example: The Power of Paying Extra

Take a R50,000 credit card balance at 22%, paying R1,500 a month. It takes about 4 years and 4 months to clear, costing roughly R28,000 in interest. Now add just R1,000 more a month: the debt clears in about 2 years and 2 months and the interest drops to around R13,000. Same debt, same rate — but paying extra cuts both the time and the interest roughly in half. Every extra rand attacks the capital directly, and a smaller capital means less interest every month after, so the saving snowballs.

Which Debt to Attack First

If you have several debts, the cheapest strategy is to throw every spare rand at the highest-interest debt first while paying the minimum on the rest — usually store and credit cards before a vehicle or home loan. Once the most expensive debt is gone, roll its payment into the next one. This is the "avalanche" method, and over time it costs the least in interest. Whatever order you choose, the lesson from the example above holds: paying more than the minimum is the single biggest lever you control.

Related tools: see all debt & budget calculators, or if you're saving rather than repaying, the compound interest calculator shows how the same discipline builds wealth.