A home equity line of credit (HELOC) can be handy, but it also can be very difficult to figure out what your payments might be or how long it will take you to pay the loan off. Because HELOCs are adjustable-rate loans during their draw period, the rate can fluctuate, sending your payments up or down.
The way HELOCs are set up further complicates the picture. Maybe you want to start paying your balance off while you're still in the draw period, before repayment is required. What if you want to start paying the loan off but anticipate making further draws down the road? That's a fairly common situation for people who use the HELOC as a cash-management tool to balance out an uneven cash flow.
A regular mortgage or home equity loan calculator can't deal with all those issues. But those are exactly what this Line of Credit Payoff Calculator is designed to do. It allows you to take all those various factors and crunch them into a single formula to figure out what your payments are likely to be.

What the Line of Credit Payoff Calculator will do

Here are just some of the things you can figure out with this calculator

  • The monthly payments need to pay off your line of credit in a certain amount of time
  • How long it would take to pay off your loan making your current payments
  • The effect that an increase or decrease in the adjustable rate will have on paying off the line of credit
  • How much faster your new payments will pay off the line of credit compared to the old one
  • The effect that new monthly charges on your line of credit will have on repaying the loan
  • The impact that making up to four new draws against your line of credit, of varying amounts and on a irregular schedule, will have on repaying the loan.

Using the Line of Credit Payoff Calculator

The calculator is fairly straightforward. However, some of the terms used may not be self-explanatory. So to use the calculator, enter the following (you can omit anything not relevant to your situation)

  • Current balance: The amount you presently owe on your line of credit
  • Interest rate:  Where the interest rate on your line of credit currently stands
  • Rate change:  How much you expect your rate to increase or decrease per year (this is obviously a guess, but once all your data is entered you can use the sliding green triangle at right to see the effects of greater or lesser changes)
  • Payoff goal: How quickly you'd like to pay off your loan balance.
  • Current monthly payment: How much you're presently paying toward your line of credit. This will be used to show how much faster your new payments would pay down the loan.
  • Additional monthly charges: How much extra you're paying toward the loan each month on top of your minimum payments (this figure may be zero).
  • Annual fee: What your lender charges each year to maintain your line of credit.

Below this is another section, labeled "future draws from line."  You may need to click the plus symbol to make this window open up.  When you do, you will be presented with options for entering amounts for up to four additional draws against your line of credit, of varying amounts and at different times. 

When all your information is entered, the monthly payment required to pay off the line of credit will show at the top of the page. The graph will illustrate how fast you'd pay off the loan with the new payment compared to your current payments.

Clicking on "show report" will take you to a new page that will show you how long it will take you, in months, to pay off the line making your current payments, taking into account all new draws against the line. You will also get an amortization table showing the rate at which your payments will decline and your accumulated interest costs based on your current payments.

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