A $500 Monthly Debt Payment Sounds Good — Until You See How Long It Takes to Pay Off $25,000

A $500 monthly payment can sound manageable on $25,000 of debt, but a high APR can consume much of that payment through interest and stretch the payoff for years – Shutterstock

A $500 monthly debt payment sounds like a solid plan for a $25,000 balance. Then interest walks into the room, pulls up a chair and starts taking a cut of that $500 before the debt gets much smaller. The payment itself matters, but the interest rate, the balance and whether new charges keep landing on the account determine how quickly the debt actually disappears.

A payment can feel substantial while making surprisingly little progress. Someone who can consistently put $500 toward debt each month may feel like the finish line sits nearby, only to discover that the balance has plenty of road left to travel.