When you make an extra payment, the entire amount goes toward reducing your principal balance rather than just covering interest. Because interest is calculated based on your remaining balance, lowering that principal sooner means you pay less interest over the life of your debt. This creates a powerful effect that helps you clear your balance faster.
See how simple extra payments can shorten your term and save you money in interest.
How to Use the Calculator
We’ve designed the calculator to be simple and intuitive. Here’s how it works:
- Step 1: Enter your current debt balance, the interest rate (APR %), and your current monthly payment amount.
- Step 2: Add an amount in the ‘extra payments’ field to see the magic happen.
- Step 3: Instantly see your new, earlier payoff date and the total amount you’ll save in interest.
- Step 4: Adjust the figures as much as you like to compare different scenarios and find a repayment plan that works for your budget.
Why Extra Payments Make a Difference
The maths behind paying off debt faster is simple but effective. When you only make minimum payments, a large portion goes towards paying off the interest. However, any amount you pay above the minimum goes directly towards reducing the principal (the original amount you borrowed).
As your principal balance shrinks, the amount of interest charged each month also decreases. This creates a snowball effect, allowing you to pay off credit cards faster with every extra payment. For example, paying an extra £50 per month on a £3,000 credit card balance at 20% APR can save you over £400 in interest and clear your balance years ahead of schedule.
Plan Your Extra Payments
Seeing how much you can save is motivating, but the next step is finding that spare cash in your budget.
To help with this, use our Pay Off Calculator to spot where you can free up money for extra repayments. By combining the savings calculator with our debt payoff tool, you can create a complete and powerful financial plan.
Tips to Accelerate Your Payoff
Ready to get started? Here are a few optional tips to speed things up even more:
- Automate your overpayments by setting up a standing order. This removes the temptation to skip a month.
- Redirect any windfalls like work bonuses, tax refunds, or side income directly towards your debt.
- Follow a clear strategy. For a complete guide on tackling credit card debt, read our article: How to Pay Off Credit Card Debt.
Discover more practical tips to manage your credit cards. Check out our Clearing Card Debt page to find out more ways to clear your balances faster.
Final Thought
Looking to pay off credit card debt? If you’re looking to consolidate credit card debt and cut down on high interest, check your eligibility for Updraft, or download our app today.
Loans from 15.3% APR (25.9% APR Representative)
25.9% APR Representative based on a £10,000 loan over 60 months at 20.40% fixed interest p.a. Monthly repayment: £283.20. Total repayable: £16,992 (inc. £600 fee). Subject to status and affordability. Consolidating debt may increase the term and total amount repaid. All figures are representative and based upon an assessment of credit and affordability. Terms and conditions apply.
From 15.3% to 41.2% APR, £1,000–£25,000, over 2–5 years available.
About Updraft
Updraft helps people pay off credit card debt. The app connects to your accounts, shows you what your borrowing costs, and where it makes sense replaces card and overdraft balances with a single Updraft loan. We’re rated 4.8 out of 5 on Trustpilot by the people using it to do exactly that. More about Updraft
Updraft Awards & Recognition
Recognised for helping borrowers take control of card debt.
Frequently Asked Questions
How does an extra payment affect my total interest?
Can I use this calculator for both credit cards and personal loans?
Yes, the tool is designed to be flexible and can model various types of debt, including credit cards and personal loans, in real time. By entering your current balance and APR, you can get an accurate picture of your path to clearing your balances.
Is there a penalty for paying off my debt early?
Most credit cards do not charge fees for overpaying, though some personal loans may have specific terms regarding early settlement. It is always a good idea to check your individual agreement, but for many, the interest savings from clearing debt early far outweigh any potential fees.