How the math works
How to use it
- Enter the balance and the rate from your current statement. Most business lines are variable and move with the prime rate, so re-run this when the rate changes.
- Be honest about new charges per month. This is the field other payoff calculators leave out, and it is usually the reason a line that was supposed to clear in a year is still there in three.
- Add the annual fee if the line has one. It is charged once a year and the calculator applies it in month 12, 24 and so on rather than spreading it, which is what actually happens.
- If you have a date in mind, put the number of months in the last field and read the payment it would take. That number is solved backwards from the same month-by-month simulation, not estimated.
A worked example
An $18,000 balance at 13.5%, paying $750 a month, still charging $200 a month to the line, with a $150 annual fee. It clears in 3 years 7 months and costs $5,128 in interest and fees. Stop drawing on the line and the same $750 clears it in 2 years 5 months and costs $3,439 — fourteen months and $1,689 of the total come from the $200 a month you keep charging, not from the rate. To clear it in 24 months instead, the payment has to rise to about $1,097.
Where this sits in the Financial Literacy resource
A calculator tells you where you are. It does not tell you what to do next, and a number without a plan behind it tends to produce anxiety rather than progress. These stages are free, need no account, and cover the decision this calculator is measuring.
Common questions
Why does a line of credit take so much longer than a loan?
A term loan has a fixed end date built into it, because the payment is calculated to clear the balance by a certain month. A revolving line has no such date. It only ends when your payments beat the interest plus whatever you are still charging to it, and if you keep drawing on it that can be never.
What payment is the minimum that actually works?
Anything above the monthly interest plus your new charges. Below that the balance grows every month no matter how long you pay. That figure is a floor, not a target — paying the floor exactly means the balance never moves at all.
Does paying earlier in the month help?
On most revolving lines, yes. Interest is charged against the balance, so reducing the balance sooner reduces the interest that accrues on it. The effect is small on any one month and meaningful across a few years. Check your own agreement, because the exact method varies.
My rate is variable. How do I plan for that?
Run it at your current rate, then run it again two or three points higher and see what that does to the timeline. Business lines are commonly priced off the prime rate, so when prime moves, yours usually moves with it within a billing cycle or two.
Should I clear the line or invest the money?
This calculator shows you what the line costs, which is one side of that comparison. The interest you avoid is certain and untaxed; an investment return is neither. We do not tell you what to do with the answer — that depends on your situation and is worth a conversation with someone licensed.
What this calculator is not
It is an educational model, not a projection and certainly not advice. It knows nothing about your income, your state, your debts or your benefits status, and it ignores taxes and fees unless the page says otherwise. If you receive SSI or SSDI some of this math works differently and getting it wrong can cost you eligibility — start with the Disability Wealth Guide instead. Our sourcing and correction policy is on the editorial standards page.
Nothing here is stored. Every calculation runs in your browser. No numbers are transmitted, logged or saved to any server, and no account is required. Close the tab and it is gone.