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Managing several debts is difficult, and it puts extra burden on you. A student loan for your children higher education, personal loan and credit cards may be your need, but when it comes to payment, and it will put you in little stress. You have to pay the high monthly fee. An excellent choice for all such debt payers is to consolidate the loan, i.e., combining all loans into one. It is called as debt consolidation loan. It is a new loan which reduces your monthly payment and interest rate. How much to pay on your new loan and how much you save? To get the answer, no need to calculate on your own, a credit card debt consolidation loan calculator will do it accurately and quickly.
Consolidation of credit card is highly beneficial as by paying off new debt quickly you can maximize your savings. Avoid putting the load on an old card which means no new purchase. Debt consolidation not only reduces the monthly payment but also reduces the tax that is you get the double benefit. However, it is advisory to know in brief about the debt consolidation before going for this option.
How does it work?
Take an example where you have three credit cards owing $20,000 at 22.99%. To pay the debt completely, you have to pay a monthly amount of $1047.37 annually. Your interest alone is $5136.88. If you consolidate your three credit cards at an annual rate of 11%, then you are supposed to pay $932.16 every month to pay the whole amount in a year. In this way, you save $115.21 every month, and in a year you will save $2,765.04.
With the example, you can analyze that it debt consolidation have the dual purpose, saving and paying all debt quickly. Hence it helps the borrowers efficiently. A customer with good payment history can go to any bank, credit card company or credit union for a debt consolidation loan. Once you get the loan, decide which bill to deal with first? The lender will determine it for you, or you can pay the bill with high interest first. You can even start with the loan with low interest, whichever suits you well.
How does the calculator work?
The credit card consolidation loan calculator is an effective method to calculate your savings and payment amount. Different credit card calculator for the different purpose is for the borrowers. You can use any of them and know things like the best deal of credit card, the minimum payment to be paid-off, the saving amount, the interest amount and many others.
Credit card calculator calculates the effective interest rate before and after taxes, total monthly payment, and savings. An individual has to give all details of his or her loans that are in current and enter them to see the estimated results. To consolidate your debt, know the credit type, balance, payment, interest, prepayment penalties, and annual fees. Check for options to combine your debt. Find the bank which can give you the loan on low interest and flexible pay-off options. Ask banks or credit unions for good consolidation program and select which suits you best.
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- Debt Consolidation – the Basics, from Barron Advisors
- Interstate Associates: When you’re at your credit limit…
- Lance Advisors Explains the Pros and Cons of Debt Consolidation