How long until the balance reaches zero
This calculator answers the repayment question from the other end: not only what you pay each month, but how the debt actually disappears month by month, and what it costs you to get there.
Every fixed instalment loan follows the same path. The balance falls slowly at first and quickly at the end, and the schedule below shows exactly where the turn happens on your numbers.
The formula behind the number
An amortising loan is repaid in equal instalments. Each one covers the interest that accrued since the last payment, and whatever is left reduces the balance. The instalment that brings the balance to exactly zero on the final payment is:
Here P is the amount borrowed, i is the monthly rate (the annual rate divided by 12) and n is the number of payments. Nothing else enters the calculation, which is why two lenders quoting the same three inputs must arrive at the same instalment.
Worked example: $15,000 at 8% over 5 years
The calculator opens on this scenario, so you can follow every step:
- Amount borrowed: $15,000
- Annual rate: 8%, so the monthly rate is 8 ÷ 12 = 0.6667%
- Term: 5 years, so n = 5 × 12 = 60 payments
Paying $304.15 every month for 60 months comes to $18,249. Subtract the $15,000 you actually borrowed and the cost of the credit is $3,248.75, or 22% of the sum borrowed.
Where each payment goes
The instalment never changes, but its composition does. The first payment carries $100.00 of interest and only $204.15 of principal. By payment 30 the split has moved to $56.62 interest against $247.53 principal.
| Payment | Instalment | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | $304.15 | $100.00 | $204.15 | $14,796 |
| 2 | $304.15 | $98.64 | $205.51 | $14,590 |
| 3 | $304.15 | $97.27 | $206.88 | $14,383 |
| 30 | $304.15 | $56.62 | $247.53 | $8,245.05 |
| 60 | $304.15 | $2.01 | $302.13 | $0.00 |
Notice that the balance is still well above half at the midpoint of the term. Amortisation is front-loaded with interest, so time does not reduce debt evenly.
What moves the answer most
Two levers change the total, and they do not pull with equal force.
Add one percentage point to the rate and the instalment goes from $304.15 to $311.38, which is $433.76 more over the full term. Cut 1 year off the term instead and the instalment rises to $366.19, but total interest falls from $3,248.75 to $2,577.30. If your goal is to be debt-free sooner rather than to lower the monthly cost, the term is the lever to pull.
What this calculator leaves out
It assumes every payment arrives on time and none are missed. A single missed instalment usually adds a fee and pushes interest onto the balance, which lengthens the schedule beyond what any calculator predicts.
Related calculators
- Debt payoff calculator — handles several balances at once
- Debt snowball calculator — orders repayment smallest balance first
- Payoff calculator — shows what extra payments do to the end date