Debt Payoff Calculator Keeps You Out of Bankruptcy

2008-05-16 12:26:45

( Financial )



Importance of Debt Payoffs

If you are deeply in debt, you should realize that you need to pay them all eventually, or face bankruptcy. It is ideal to start reorganizing all your debts and pay them as soon as possible. You can do that easily with a debt payoff calculator.

Features of the Debt Payoff Calculator

You can find debt payoff calculators in many online sites that offer debt consolidation or relief services.

A debt payoff calculator looks like a table or schedule with several columns.
You need to gather all information about all your debts, including credit card balances. You have to be precise about the outstanding balance, the number of payments left, and the interest rate of each liability. It would be better if you list from smallest to highest debt.

Then you figure out how much you are willing to set aside each month for paying your consolidated debts. You place this amount at the bottom of the schedule after you have listed all the details of your debts. You click on a button, and the payoff calculator will show you the amount you have to pay if all your debts have been consolidated.

The next step is to input the total debt amount, the payoff period and the interest rate of your consolidated loan. You will only enter hypothetical figures for the payoff period and interest rate if you haven't received any loan consolidation offers yet.

The debt payoff calculator will generate a payment schedule which will show you the remaining liability amount after each payment period. Provided that you don't incur any other debts aside from the consolidated loan, you will have an idea how long it will take to pay all your debts in full.

Precautions about Debt Payoff Calculators

The debt payoff calculator can be handy for giving you estimates about your future liabilities in case you were to consolidate your debts. However, it does not include any past due penalties or insurance charges for mortgages.

As with any other plans, the payment schedule that the calculator generates is only good on theoretical grounds. You should still make a firm commitment to pay off the right amounts as they become due, and to avoid incurring new liabilities for the time being.


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