1. What Is The Rolling Debt Calculation?

The Rolling Debt calculation determines the new balance of a debt after accounting for interest charges and payments made. This is essential for tracking the progress of debt repayment over time.

2. How Does The Calculator Work?

The calculator uses the Rolling Debt formula:

Where:

• Old Balance — The previous amount owed
• Interest — Additional charges applied to the debt
• Payment — Amount paid toward reducing the debt

Explanation: This calculation shows how debt evolves over time, accounting for both the cost of borrowing (interest) and reduction through payments.

3. Importance Of Debt Tracking

Details: Regularly calculating rolling debt helps individuals understand their financial progress, plan repayment strategies, and avoid the negative consequences of accumulating interest.

4. Using The Calculator

Tips: Enter all values in currency units. Ensure payments are realistic based on your financial situation. Regular tracking helps identify when debt is growing despite payments.

5. Frequently Asked Questions (FAQ)

Q1: What if my payment is less than the interest?
A: Your debt will continue to grow despite making payments, a situation known as negative amortization.

Q2: How often should I calculate rolling debt?
A: Monthly calculations align with most billing cycles and provide a clear picture of debt progression.

Q3: Does this calculation work for all types of debt?
A: Yes, this formula applies to credit cards, loans, and other forms of debt where interest accrues on an outstanding balance.

Q4: What's the best strategy for debt repayment?
A: Prioritize paying off high-interest debt first while making minimum payments on other debts (avalanche method), or pay off smallest balances first for psychological wins (snowball method).

Q5: When should I seek professional debt help?
A: Consider professional advice if your total debt exceeds 40% of your income, you're only making minimum payments, or you're using debt to pay for essentials.