Line of Credit (LOC) Payoff Calculator

Estimate how long it will take to pay off your LOC with fixed payments.

Calculate Your LOC Payoff Timeline

LOC rates are often variable; use your current rate or an estimate.
Enter a fixed amount greater than the first month's interest.

Paying Off a Line of Credit (LOC)

A Line of Credit (LOC) offers flexibility, allowing you to borrow and repay funds up to a certain limit, similar to a credit card. Unlike traditional installment loans (like auto loans or mortgages) with fixed terms and payments designed to pay off the balance by a specific date, LOCs often have minimum payments based only on the current balance and interest rate.

Making only the minimum payment on an LOC can mean it takes a very long time to pay off the balance, especially if the interest rate is high, as a large portion of the payment goes just to cover interest charges.

Using This Payoff Calculator

This calculator helps you understand how long it will take to pay off your current LOC balance if you commit to making a **fixed monthly payment** that is higher than the minimum required. By entering your current balance, interest rate, and the fixed payment amount you plan to make, you can estimate:

  • Payoff Time: How many years and months until the balance reaches zero.
  • Total Interest Paid: The estimated cost of borrowing over the payoff period.
  • Total Payments: The number of fixed payments plus the potentially smaller final payment.

This allows you to create a concrete payoff strategy instead of relying on fluctuating minimum payments.

Important Considerations for LOCs:
  • Variable Interest Rates:** Most LOCs have variable rates that can change over time, affecting how quickly your fixed payment pays down the principal. This calculator uses the rate you enter as a fixed estimate.
  • Minimum Payments:** Your actual minimum payment due might change based on your balance and the variable rate. This calculator assumes you consistently pay your chosen *fixed* amount, regardless of the minimum due.
  • Fees:** Some LOCs have annual fees or other charges not included in this calculation.
  • Temptation to Draw More:** Having available credit can be tempting. A payoff plan only works if you stop drawing additional funds from the line while paying it down.

How to Use This Calculator

  1. Enter your Current Line of Credit Balance.
  2. Input the current or estimated Annual Interest Rate (APR).
  3. Enter the Fixed Monthly Payment you plan to make consistently. **This payment MUST be greater than the first month's calculated interest** (Balance * APR / 12 / 100) for the calculator to work.
  4. Click "Calculate Payoff".
  5. Review the estimated payoff timeline, number of payments, final payment amount, and total interest paid.

Disclaimer: Estimates are based on the fixed interest rate and fixed monthly payment entered. Actual payoff time and total interest will vary if the interest rate changes, payments are missed, or different payment amounts are made. This calculator does not account for potential fees. For informational purposes only.

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