Cost-of-Debt Calculator
Use this calculator to see just how expensive paying interest on your debt can be.
How the cost-of-debt calculator works
It combines several debts into one view, weighting each interest rate by its balance to produce a blended rate, then applies that rate to your total balance to show what the debt costs in interest every month and year.
Worked example: with debt 1 — balance of $8,000, debt 1 — rate of 22.00% and debt 2 — balance of $15,000, the cost of debt calculator shows blended interest rate of 12.18%.
- Total debt
- $28,000
- Blended (weighted) rate
- 12.18%
- Interest per month
- $284.17
- Interest per year
- $3,410
The formula
Blended rate = Σ(balance × rate) ÷ Σ(balances). Monthly interest = total balance × blended rate ÷ 12.
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender, plan administrator or advisor.
Questions about the cost-of-debt calculator
What is a blended interest rate?
The balance-weighted average of all your debt rates — a single figure that captures the true overall cost of carrying multiple balances at different rates.
Which debt should I pay off first?
Targeting the highest-rate balance (the avalanche method) lowers your blended rate and total interest fastest. The breakdown shows which debt costs you most.
Why does my total interest matter?
It is the real price of your debt. Seeing it as a monthly and annual figure makes the cost concrete and shows how much paying down balances frees up.
Is the Cost-of-Debt Calculator free to use?
Yes. Every calculator on FinCalculators is completely free, with no sign-up, login or paywall. You can run as many scenarios as you like.