GuidesDebt1 min
Debts you already owe · Lesson 6 of 11
A payment that does not cover interest
0% complete
0% of Debts you already owe
If the payment is not larger than a month of interest, the balance never falls. The date says the payment does not cover the interest.
The test
Month’s interest is the balance times the rate divided by twelve. If the payment is less than or equal to that interest, the balance stays put or grows. The calculator does not invent a payoff month.
You will see that stated on the debt’s date instead of a calendar month.
What to change
Raise the minimum on that row, or add an extra payment large enough that this row’s share clears the interest. The extra is not aimed at the highest rate. It is split by the size of the minimums.
A rate typed as 24 for a card is 24% a year. Typing 0.24 would be a quarter of a percent and would hide the problem.
It still counts in the month
The minimum is still added to the debt total even when it never pays the balance off. The month is what leaves your account. The date is whether the balance ends.
Leaving the row out would make leftover look safer than it is.
This explains how WiseCalculator treats the numbers you type. It is not a lender’s offer and it is not advice for your loan.
More in Debt
- Extra money is split by the minimumsAn extra monthly amount is shared across debts in proportion to each minimum payment. It is not sent entirely to the highest rate.
- Interest with and without an extra paymentThe debt screen compares interest and time at your minimums with interest and time after the extra is split.
- A credit card balance and rateType the balance you owe, the purchase APR as a yearly percent, and the minimum the statement asks for.