Debt Consolidation Calculation Overview
If you’re looking for a getaway to pay off your debts, debt consolidation is one of the common means. You can take out one huge loan and use it to pay off smaller debts. It minimizes the paying of your bills if done accurately. It aims to reduce your monthly payment and its interest rate.
In This Guide...
Debt Consolidation Calculation
For instance, you have $15,654 with a 16.1% interest in credit card debts, if you make the minimum payments for these debts it can cost you $315 every month and approximately 6 years and 8 months to pay it off. Now, if you’re able to get a 10-year debt consolidation loan amounting to $15,654 at a 10% interest rate, you’ll no longer pay for $315 every month. Instead, it can reduce your payment to $207 per month, which gives you an extra of $108 each month.
Moreover, if you’re able to pay it in 10 years, you can gain an extra of $1,210 interest. If you pay more than the minimum by adding the $108 that you have, it can only take you 5 years and 4 months to pay it off. By looking at these numbers, the $315 each month that you’re paying without debt consolidation loan can take 82 months (6 years and 8 months), while through a debt consolidation loan can only take you 65 months (5 years and 4 months).
Information About Debt Consolidation
Debt Consolidation Loan Companies
Other than the interest rate, there are several factors to consider when getting a debt consolidation loan. These include closing fees, service fees, pay-off dates, and other conditional charges. below are the three main options where you can get a debt consolidation loan:
- Credit Unions
- Banks
- Online Lenders
Consolidated Debts
- Credit Card Debt
- Unsecured Loans
- Medical Debt
- Past Due Utilities
- Collection Accounts
- Payday Loans
What to Consider in Getting Consolidation Loans?
Keep in mind that though debt consolidations won’t necessarily solve your financial trouble if you are not cautious with your manner in spending. Along with other debt solutions, no matter how the calculation serves you right, it needs discipline and strict budgeting. Exploring your options is necessary to learn more about the most efficient way to be free from debt. Thus, you might want to start HERE.
How to Consolidate Your Debts in Canada
- Add the Debt to Your Mortgage
- Get a Debt Consolidation Loan
- See if Family Will Lend You Money
- Other Options such as selling of assets, getting a second job, and living on a budget
Debt Management Program or Orderly Payment of Debts
If none of the listed tips and pointers to pay off your debts won’t work. You can seek credit counseling to see what other options suit you. You may qualify for a consumer proposal, or an orderly adjustment of debts plans. These solutions can help you incorporate all your debts into one payment with lower interest rates. A consumer proposal, for instance, helps you get back on track towards financial stability. It is designed for people who have taken out too much debt and are striving to reach their monthly repayments.
All you need is to explore your options here and see if you qualify…
