Debt Payoff Example
How Much Interest Are You Paying? — Debt Cost Examples
Eye-opening examples showing the true cost of carrying debt at various interest rates.
Scenario
Carrying $10,000 in debt at various APRs for 5 years.
Inputs
Balance$10,000
Term5 years
Results
At 6% (personal loan)$193/month / $1,600 interest
At 12% (auto loan)$222/month / $3,334 interest
At 18% (credit card)$254/month / $5,265 interest
At 24% (high APR card)$290/month / $7,373 interest
Explanation
The rate difference is staggering. 24% vs 6% costs $5,773 more over 5 years on the same $10k. This is why debt consolidation — moving high-rate debt to lower-rate loans — is so financially powerful.
Key Takeaways
- Check your credit card APR right now — it's likely 20–29%.
- A 750+ credit score qualifies for 6–8% personal loans to replace credit card debt.