For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.


Debt Calculator – Find Out How Much

debt calculator

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

Sometimes, calculating or keeping track of your debts may seem like a difficult job, but it is something absolutely crucial to do as a debtor.

If you’re also facing difficulties, a debt calculator can help you sort your debt problems. 

In this guide, I am going to tell you all about how to calculate debt, how to manage your debt, and how much debt is too much debt.

Let’s begin.

How do I Calculate My Debt? – Debt Calculators

The most common and quickest way to sum up your debts is by using debt calculators. 

A debt consolidation calculator is a tool that will show you how much debt you owe and how much time it can take for you to get debt free.

You can also use these calculators, to sum up, the debts you have. The best thing about these calculators is that they consider the interest rates associated with each debt as well.

To calculate the total of debts, you will need to add up the amounts you owe. 

For example, £1000 + £2000 + £1200 + £300 = £3500

Like this, you can easily tell how much debt you owe. However, if you want to know about the practical debts you owe, you need to follow this formula:

Total Debts – Available Cash/Liquid assets = Net Debts 

So, for instance, keeping the same aforementioned example in mind, £3500 is the amount of debts liable upon you and you have £500 available in cash and liquid assets. Hence, the net debt will be considered as £3000.

This formula is used by keeping the fact in mind that you can pay a certain amount instantly, thus, that amount should be deducted when calculating the Net Debt. 

All of this can be done within seconds by a debt calculator!

How Long Will it Take to Pay Off Debt?

It really depends upon the amount and type of debts that you have to repay. So, for every person, the answer to this question is different. 

However, don’t worry, I’ve still got you covered. You can either use the Barclay loan repayment calculator or use this method as well:

  1. Calculate your total debts
  2. Divide them in monthly installments
  3. Fix a part of your income for repayment 
  4. Calculate the total months after which the debt will be cleared

How Much Debt is Too Much?

The best way to get the answer to this question by using the DTI formula. The debt to income formula calculates how much of your income is going towards paying your debts. To calculate the DTI, you need to follow these steps:

  1. Calculate the total amount of your monthly payments of debts, e.g, credit cards dues, loans, and other amounts. (Make sure you list all the amounts and details of the debts correctly)  
  2. Sum up your monthly income
  3. Divide the total of your monthly debt by your monthly income
  4. Multiply it by 100

Total Monthly repayment of debts x 100 = Debt to Income ratio 

     Monthly Income 

Now let’s understand what this formula means.

The answer to this calculation represents the percentage amount of your income that is going towards paying debt. 

A higher answer means that a higher amount of your income is going towards paying the debts, leaving you with less income to spend.

The smaller the answer to this equation, the better it is for you. Being an expert on personal finance, I would say the answer to this equation should never exceed 25%

A healthy DTI ratio percentage rate stands between 5-15%. This is the simplest way to see how much debt is too much. 

Understanding Interest & Additional Charges

The interest rate is a very important factor in debt calculation and its repayment. 

With higher interest rate debts, it will be hard for you to achieve a life free of debt. The interest rate or the annual percentage rates (rate APR)  can cause you heavy damage if it is not managed properly.

To simply understand why high-interest rate debt is dangerous you need to understand the concept of compound interest. If the debt is not eliminated, the interest will slowly form a situation where you will have to pay interest upon the interestable amount.

What Debt Should Be Paid Off First?

debt calculator uk

A basic rule of debt paying is that debts with a higher rate of interest or APR should be paid first. As discussed above, if you don’t take care of debts with higher interest rates, e.g, credit cards, and etc, these debts will charge you compound interest on the repayment amount. 

You can plan out your monthly repayment schedule and then figure out which debts should be prioritized and which should be seconded, or use a credit card loan calculator.

How Can I Pay Off Debt? – Debt Solutions

Paying off your debt might not be as difficult as it sounds, there are many ways which you can use to pay back your debts and have a debt free life. Let’s discuss a few of them below. 

Pay Back in Instalments – Debt Management Plan

This is the most suitable and easiest way for people with a fixed monthly income. You can adapt this approach and effectively clear all the loans you are liable to pay. 

Make a budget statement for your debts and divide up a part of your income from which you have to pay back the due amount. In this way, you’ll have lesser chances of overspending while paying your debt off gradually.

Individual Voluntary Arrangement

The IVA is a legal and formal agreement that is held between a debtor and a creditor. It mentions all the details and information about the debt and its payback period.

Please remember that this is a formal and legal agreement, which is drafted by a professional accountant or a lawyer and the breach of this contract may lead to legal action. 

Debt Consolidation Loan

Consolidation here means to combine. These loans are taken through a bank to pay back your creditors and consolidate your debt towards the bank.

You will have to pay a lower interest rate to the bank, hence, saving you from additional costs. Use a debt consolidation calculator for more information on arithmetic workings.


How do debts affect my credit rating?
If you don’t pay back your debt, this will adversely affect your credit rating. The negative effect on your credit rating means that banks and creditors will hesitate while lending you money.
Can I dispute a miscalculated debt?
Yes! You can surely dispute a miscalculated debt. If you don’t deem yourself liable to pay any amount, you can always write to your creditors and furthermore, you can always challenge it in the court of law or a financial conduct authority.
Who do I owe money to?
To answer this question, you need to understand the laws and concepts regarding the acknowledgement of debt, you can check out my other article on this topic here. Usually, you owe the money to your creditors but it is highly possible that your creditors sell that debt towards a debt collection agency, which means now you are liable to pay them that certain debt.
Who are debt collectors & collection agencies?
Debt collectors and collection agencies are separate business entities with the sole purpose of collecting debts. They purchase debts from different creditors and collect them on their behalf while charging a commission.
Where can I get free debt advice?
You can always seek debt advice from different debt-related institutions that are working to provide a better financial life to people, such as StepChange. Try searching online for free debt help services around you and choose the ones that suit you the most. You can also reach out to skilled financial experts in your family and friends, who are willing to provide you free advice.

Wrapping it Up

I know that debt calculation and its monthly repayments can be hectic and mentally stressful but don’t worry, with correct help and advice, it is an easy step that can lead you towards a debt free life.

If you have any queries or questions, feel free to reach out and I’d get back to you ASAP.


Are you struggling with debt?
Are you struggling with debt?
  • Affordable repayments
  • Reduce pressure from people you owe money to
  • Stop interest and charges from soaring