Debt Payoff Example
Pay Off $20,000 Debt — Payoff Strategies
Compare debt payoff strategies for $20,000 in debt at 12% APR.
Scenario
$20,000 at 12% APR — standard vs. aggressive payoff.
Inputs
Debt$20,000
APR12%
Results
$300/month106 months / $11,686 interest
$500/month49 months / $4,290 interest
$700/month33 months / $2,825 interest
Explanation
$20k at 12% with minimum-ish payments ($300) takes nearly 9 years and costs $11.7k extra. At $500/month (4 years), you save $7,400 in interest. This is the range for a car loan or small personal loan balance.
Key Takeaways
- Auto loans at 8–12% should be a priority after high-rate credit cards.
- Refinance auto loans — many credit unions offer 5–7% for strong credit.