Calculation Methodology

This page outlines the exact mathematical guidelines used by the simulator. The calculator processes calculations inside the browser using integer cents.

Simulation Mechanics

• Stable Priority: Debts are sorted by initial balance, from smallest to largest. Ties are broken based on input order. The priority list remains stable and does not change dynamically even if balances cross during repayment.
• Monthly Budget: Fixed monthly budget is defined as the sum of all starting minimum payments plus the user's selected extra monthly payment.
• Sequence of Payments: Each month, we accrue interest for the active debts: Balance = Balance + round(Balance * APR / 12 / 100). Next, we deduct the minimum payments for all active debts. Lastly, the remaining available pool is applied to the highest priority target debt. Leftover funds from a paid-off debt roll over into the next target immediately in the same month.

Known Limitations

Most creditors apply daily interest accruals and grace periods. This calculator uses standard monthly compound modeling which yields a simplified simulation rather than an exact match of monthly statements.