Line of Credit Payment Calculator – HELOC & LOC Estimator
Calculate line of credit payments and payoff timelines with different payment strategies.
Results are estimates only. Actual payments may vary based on your lender's terms and conditions.
Table of Contents
How to Use
- Enter your credit limit and current outstanding balance.
- Input the annual interest rate (APR) on your line of credit.
- Select your payment strategy: minimum only, fixed amount, or payoff goal.
- For minimum payments, enter the minimum payment percentage and floor amount.
- Click Calculate to see your payment amount, payoff time, and total interest.
The minimum payment trap
Paying only the minimum on a line of credit can take decades to pay off and cost thousands in interest. Minimum payments are designed to keep you in debt longer, benefiting the lender.
- Minimum payments barely cover interest charges.
- As balance decreases, minimum payment decreases too.
- A $10,000 balance at 18% APR can take 30+ years with minimums.
- You could pay more in interest than the original balance.
Effective payoff strategies
- Pay more than the minimum: Even $50 extra can save years.
- Set a fixed payment: Keep paying the same amount as balance drops.
- Target a payoff date: Calculate what you need to pay monthly.
- Make biweekly payments: Results in one extra payment per year.
- Apply windfalls: Use bonuses or tax refunds to pay down balance.
Understanding credit utilization
Credit utilization—the percentage of your credit limit you're using—affects your credit score. Keeping utilization below 30% is recommended, and below 10% is ideal for the best credit scores.
- High utilization (above 30%) can lower your credit score.
- Paying down balances improves utilization immediately.
- Multiple credit lines can help spread utilization.
- Check your utilization before applying for new credit.
Frequently Asked Questions
- How is the minimum payment calculated?
- Most lenders calculate minimum payments as a percentage of your balance (typically 1-3%) or a fixed floor amount (like $25), whichever is greater. Some also add any past-due amounts and fees.
- What's the difference between a line of credit and a credit card?
- Both are revolving credit, but lines of credit often have lower interest rates and may be secured by collateral (like a HELOC). Credit cards typically have higher rates but offer rewards and purchase protections.
- Should I pay off my line of credit or save money?
- Generally, if your LOC interest rate is higher than what you'd earn on savings, paying down the debt first makes financial sense. However, maintain an emergency fund for unexpected expenses.