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Loan to Pay Off Credit Cards Calculator

Reviewed by Calculator Editorial Team

This calculator helps you determine how much you need to borrow to pay off your credit cards, considering interest rates and repayment terms. It provides a clear repayment plan and estimates your potential savings compared to continuing to pay minimum payments.

How the Calculator Works

The loan to pay off credit cards calculator uses a simple formula to determine the optimal loan amount that will pay off your credit card debt faster than continuing to pay minimum payments. The key factors considered are:

Formula

Loan Amount = Total Credit Card Debt - (Minimum Monthly Payments × Loan Term)

Where:

  • Total Credit Card Debt = Sum of all your credit card balances
  • Minimum Monthly Payments = Sum of all your minimum monthly payments
  • Loan Term = Number of months you plan to take to repay the loan

The calculator then compares this loan amount to the total interest you would pay if you continued to make minimum payments, showing you the potential savings.

How to Use This Calculator

  1. Enter the total amount of debt you owe across all your credit cards.
  2. Enter the sum of all your minimum monthly payments.
  3. Select the loan term (in months) you plan to take to repay the loan.
  4. Enter the interest rate you can get on a personal loan.
  5. Click "Calculate" to see the results.

Tip: To maximize savings, choose a loan term that matches your ability to repay. Shorter terms mean lower interest costs but higher monthly payments.

Worked Example

Let's say you have three credit cards with the following balances and minimum payments:

Card Balance Minimum Payment
Card A $2,000 $50
Card B $1,500 $30
Card C $1,000 $20
Total $4,500 $100

If you take out a $3,500 loan at 8% interest over 24 months, you would:

  • Pay off $3,500 of debt immediately
  • Have $1,000 remaining on your cards
  • Pay $100/month in minimum payments on the remaining $1,000
  • Pay $375 in interest on the $3,500 loan
  • Save $1,125 compared to continuing to pay minimum payments for 24 months

Frequently Asked Questions

How does this calculator determine the optimal loan amount?
The calculator compares the total interest you would pay by continuing to make minimum payments with the interest you would pay on a loan that pays off your debt faster. It finds the loan amount that gives you the biggest savings.
What interest rate should I use for the loan?
Use the interest rate you can realistically get on a personal loan. Check with banks or credit unions for current rates. Personal loans typically have lower rates than credit cards.
Is this calculator right for me if I have multiple credit cards?
Yes, this calculator works for any number of credit cards. Just enter the total balance and total minimum payments across all your cards.
What if I can't get a loan with the exact amount calculated?
You can adjust the loan amount up or down and see how it affects your savings. The calculator shows you the potential savings for any loan amount.