Credit Card Calculator
Calculate how long it will take to pay off your credit card balance. See how interest affects your timeline and how to clear debt faster.
Credit Card Repayment Calculator: How Interest Impacts Your Pay-Off Date
Are high-interest credit card repayments standing between you and your new home? At Westgate Home Loans, we believe the fastest way to a home deposit is by eliminating high-interest debt. Our Credit Card Repayment Calculator pulls back the curtain on how much your credit card is actually costing you.
Understand exactly how long it will take to reach a zero balance and see how much of your hard-earned money is being lost to interest charges every month.
The True Cost of “Minimum Repayments”
Paying only the minimum amount requested by your bank is a trap that can keep you in debt for decades. For many Perth residents, credit card interest rates can exceed 20%, making it nearly impossible to lower the principal balance.
Our calculator helps you visualise:
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The Interest Gap: See how much of your payment goes to the bank versus your balance.
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The Time Factor: Discover how adding just $50 extra a month can shave years off your debt timeline.
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Borrowing Power Recovery: Every month you are debt-free brings you closer to a successful home loan application.
Clean Up Your Finances with Westgate Homeloans
If your credit card balance is holding you back, you don’t have to tackle it alone. Our team specialises in helping Western Australians prepare their “financial fitness” for home ownership:
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Debt Consolidation: We can explore options to roll high-interest credit card debt into a lower-interest loan, potentially saving you thousands.
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Budgeting for a Build: If you’re planning to build a new home, we can help you time your debt exit to coincide with your land settlement.
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Expert Guidance: Once your cards are under control, we’ll show you how much your home loan borrowing power has increased.
Frequently Asked Questions (FAQs)
Q. Should I pay off my credit card or save for a deposit?
A. Paying off a credit card is usually better. With interest rates often above 20%, clearing debt saves you more than you’d earn in a savings account. It also significantly boosts your borrowing power – often by 5 to 6 times the credit limit you close.
Q. How much does a credit card limit affect my loan?
A. Lenders look at your total limit, not just your balance. In Australia, every $5,000 of credit limit can reduce your borrowing capacity by roughly $25,000 to $30,000. Closing unused cards is the fastest way to increase your loan amount.
Q. What is the fastest way to pay off my card?
A. Focus on the card with the highest interest rate first while paying the minimum on others. Once a balance is zero, close the account rather than leaving it open; this ensures your “potential debt” is removed from your home loan assessment.
