Debt Payoff Example
Pay Off $10,000 Debt — Payment Plans Compared
Compare payment timelines and total interest for $10,000 in debt at different monthly amounts.
Scenario
$10,000 at 15% APR — compare $200, $300, $500/month plans.
Inputs
Debt$10,000
APR15%
Results
$200/month79 months / $5,714 interest
$300/month44 months / $2,988 interest
$500/month24 months / $1,455 interest
Explanation
$10k at 15% with $200/month takes 6.5 years and nearly doubles in cost. Increasing to $300/month cuts the timeline in half. This illustrates why aggressively paying down consumer debt is almost always the best 'investment' you can make.
Key Takeaways
- Personal loan at 8–10% could replace 15% debt — refinancing saves thousands.
- The debt snowball: pay minimums on all debts, throw extra at smallest balance.