Debt Reduction Calculator

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  • January 4, 2022 Updated
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Are you thinking about paying off your debts? Especially credit card debts? You might need this debt reduction calculator to help you managing the payment. This calculator will illustrate how much time and money you could save by paying off your debts with the certain method.

Debt Reduction Calculator Template Excel Template

There are two common methods to pay off these debts. The first method is an Avalanche method. This method is proposing you to pay off your highest interest rate first. When that balance is paid in full, apply its monthly payment to the balance with the next highest interest rate until all debts are paid off. The second method is a Snowball method. Under this method, additional payment is dedicated to pay off debts with the smallest amount owed. And when a balance is fully paid, you can allocate the payment to the next smallest balance until all debts are paid off.

What is the most suitable method for your current condition? If you concern about the amount of interests, you can choose the avalanche method. If you concern about reducing the number of debts as quick as possible, you can select the snowball method. You can calculate it first using this calculator if you are not sure about selecting correct option. It requires basic information like credit card balance, Annual Percentage Rate (APR) or credit card interest rate and minimum payment. Don't forget to put additional payment that you will spare on top of total minimum payment.

In this template, you can write detail information about your debts in maximum ten rows. You can fill it with any types of loans, like credit card and personal loan. I put dummy information to give you a rough figure on how this spreadsheet works.

How to Use Debt Reduction Calculator

Type loan names (credit card and other loans) in names column. Dummy data have been filled for your reference. You can replace it with your own with more detail names. Then, put balance, APR, minimum payment in both % and amount in respective cells. Don't forget to type the amount of additional payment as well as date of current balance on top of the table. The date will be used as a starting marker. All fields that you must fill have white background. There are excel formulas in remaining fields to compute the amount of payment for each loans.

Anyway, this template is not a perfect calculator. It doesn't take in account dynamic interest rate within a single credit card balance. For example, your credit card balance could consist several transaction with different interest rate which would generate different calculated remaining balance after you pay it. To solve this, you can try to separate those transactions into several rows.

You can see its summary at the top of the worksheet. With reference to dummy data, if you pay off your debts with avalanche method (lowest balance first), you will pay off all of your debts within 52 months. If you pay off your debts by following snowball method (highest interest first), you will pay off your debts within 46 months. In this case, total interests for snowball method is lower than avalanche method. You can see the order of paid off loans at the left side of written loans. Pay off order is different for both methods.


In conclusion, using this debt reduction calculator should help you managing your monthly expenses, especially your credit card payment. By understanding the logic, you can spend the money to correct loan payment in order to minimize calculated interest. If you are looking a more simple one, for single credit card transaction, you can use this simple credit card pay off calculator.

This debt reduction calculator template is fully editable. You can learn its formulas and modify it to meet your own needs.

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