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Why estimating months-to-payoff matters (first half). Knowing roughly how many months a fixed payment will take to eliminate a revolving balance frames decisions: whether to increase the payment, choose a balance transfer, or consolidate. The payoff timeline depends on current balance, APR (converted to a monthly rate), and the monthly payment. For the $2,500 balance at 18% APR with $150 monthly payments, iterative amortization shows that interest each month is charged on the remaining balance and the fixed payment reduces balance by (payment − interest) each period. That compounding effect means the payoff period is not simply balance ÷ payment; interest slows principal reduction earlier on. One-line calculation (example numbers only): iterative amortization of $2,500 at 18% APR with $150/month yields about 20 months to payoff.

Practical uses and alternatives (second half). Once you know the payoff horizon, decide whether you can: (a) increase monthly contribution to shorten the term and reduce total interest, (b) transfer the balance to a lower-rate promo or low-APR card after checking fees, or (c) consolidate to a lower-rate installment loan if long-term cost is lower. Beware of balance-transfer fees and promotional expirations; a short-term transfer to a 0% promo can be effective if you can pay off before the regular APR returns. Also consider emergency buffers: avoid paying so aggressively that you lack cash for essentials. Use payoff calculators or an amortization table to see how extra payments accelerate principal reduction and reduce interest.

Did You Also Know...

By Quiz Coins

Persistent inflation erodes cash purchasing power, which is why savers often seek investments that outpace inflation.

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