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you
will be connecting to our affiliated sites
within the
SayPlanning / SayLending network
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Use
this option if you have minimal loan debt
that can be paid offer within 12-36 months |
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- :
this may be an ideal option if your
budget allows for an extra amount to
be used to quickly payoff your loans.
You may consider consolidating your
existing loans under a lower rate and
budgeting the same amount to payoff
your consolidation loan: See
Option 2: Consolidate Your Loan.
-
analyze your monthly budget to determine
how much money you can allocate for
this payoff plan.
Link to our budget planning worksheet:
click
here
- open
this calc window to identify the
loans that you would like to payoff.
List the loans in order from the lowest
loan balance to the highest.
Let's illustrate this concept by using
the following loan balances with a period
of 5 years before the final loan is
paid (assuming no additional debt):
|
Balance |
Payment |
Rate
|
Loan1 |
$800 |
$32 |
12.5% |
Loan2 |
$1200 |
$40 |
12.5% |
Loan3 |
$2777 |
$67 |
12.5% |
Loan4 |
$8530 |
$175 |
8.00% |
Loan5 |
$18997 |
$453 |
6.75% |
Total
Period to payoff final loan: 5
years |
group at least 2 low-balance loans together
and pay them off within 6-12 months.
(You may use a credit card transfer
program to get the low transfer interest
rate during your payoff period).
Once you payoff these two loans, group
the next low-balance loan and pay it
off quickly over 12-24 months.
This payoff grouping builds a momentum
where you erase 1-2 loans quickly from
your monthly payment plan. The savings
can then be applied to other monthly
loan payments to reduce your aggregate
loan balances quickly.
Example:
Take the first two loans on your list
(Loan1 and Loan2) and group them together.
Set a budgeted payoff plan within 9
months:
— your payoff balance: $2000
— current debt payment: $72 ($32+$40)
— additional payment needed to
payoff within 9 months: $162
—
(see
calculation)
— total monthly payoff amount:
$234 ($72+$162)
The extra $162 per month will need to
come from budget planning by reducing
other monthly expenses:
link to our budget planning sheet at
our parent site: click
here
note that you will still continue to
pay on your other outstanding loan debt
- once you have successfully
paid off the two loans in 9 months,
your current loan portfolio will look
like this (assuming no additional debt
and payment reduction on your other
loans):
|
Balance |
Payment |
Rate
|
Loan1 |
$0 |
$0 |
12.5% |
Loan2 |
$0 |
$0 |
12.5% |
Loan3 |
$2372 |
$67 |
12.5% |
Loan4 |
$7308 |
$175 |
8.00% |
Loan5 |
$15450 |
$453 |
6.75% |
Now take the next loan and apply the
same payoff proceeds to this loan:
— your payoff balance: $2372
— monthly payoff amount: $301
($234 above + $67 current
pay)
— time needed to payoff: 8.3 months
(see
calculation)
Now after 9 months, you current loan
portfolio looks like this (assuming
no additional debt and payment reduction
on your other loans):
|
Balance |
Payment |
Rate
|
Loan1 |
$0 |
$0 |
12.5% |
Loan2 |
$0 |
$0 |
12.5% |
Loan3 |
$0 |
$0 |
12.5% |
Loan4 |
$6004 |
$175 |
8.00% |
Loan5 |
$11698 |
$453 |
6.75% |
continue your group payoff by taking
the next loan and applying the same
payoff proceeds:
— your payoff balance: $6004
— monthly payoff amount: $476
($301 above +$175 current
pay).
— time needed to payoff: 13.2
months (see
calculation)
After 13 months, your current loan balance
will look like this:
|
Balance |
Payment |
Rate
|
Loan1 |
$0 |
$0 |
12.5% |
Loan2 |
$0 |
$0 |
12.5% |
Loan3 |
$0 |
$0 |
12.5% |
Loan4 |
$0 |
$0 |
8.00% |
Loan5 |
$6079 |
$453 |
6.75% |
apply the same payoff proceeds to payoff
your last loan:
— your payoff balance: $6079
— monthly payoff amount: $929
($476 above +$453 current
pay).
— time needed to payoff: 6.9 months
(see
calculation)
- by grouping low-balance
loans together and budgeting an additional
$162 for debt payoff, you were able
to eliminate this debt within 3 years.
That is two years less than allowing
these loans to run their term.
The magic of grouping is that it eliminates
low balance loans quickly so that you
have the motivation and additional funds
to pay down your next loans.
You can achieve the similar payoff time
if you allocated an additional $162
each month to pay down a consolidation
loan. See example under
Option 2.
Grouping works best when you develop
a spending plan that meets your budgeted
allowance for living and debt payoff.
See our
topic on budget planning
review our section on lowering your
monthly bills in housing, transporation,
living, recreation, and more.
Click
to view "lowering your bills"
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Use
this option to consolidate your loan debt
under one repayment plan |
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- :
this may be an ideal option if you can
consolidate your loans under a repayment
plan that offers an interest rate that
is lower than the weighted interest
rate charges on your existing loans.
Let's assume that you had the following
loans that will take 5 years before
the last loan has been paid off (similar
to the example above).
If you consolidated the following loans
under a consolidation rate of 7.00%
with a 10-year repayment plan, you would
save around $392 each month over current
payments.
These savings can be applied as an extra
amount each month to pay down your consolidation
loan within 4 years — 1 year earlier
if you didn't consolidate.
If you budgeted an additional $162 as
illustrated under Option
1 above, you will be able to eliminate
this debt within 3 years.
Current
Outstanding Loans |
|
Balance |
Payment |
Rate
|
Loan1 |
$800 |
$32 |
12.5% |
Loan2 |
$1200 |
$40 |
12.5% |
Loan3 |
$2777 |
$67 |
12.5% |
Loan4 |
$8530 |
$175 |
8.00% |
Loan5 |
$18997 |
$453 |
6.75% |
Total |
$32,304 |
$767 |
|
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Consolidation
Loan: 10-yr Repayment Term |
|
Balance |
Payment |
Rate
|
Total |
$32,304 |
$375.08 |
7.00% |
Savings |
|
$392.00 |
($767-$375) |
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Payoff
Amounts |
Current |
|
$375.08 |
(payment) |
Extra1 |
|
$392.00 |
(savings) |
Extra2 |
|
$162.00 |
(budgeted
amt) |
Payoff |
38
months |
-
:
by using the security of your home,
you can secure a home equity or
home refinancing loan at low rates
with repayment terms of 5 or more
years. You can use this loan to
consolidate your credit card and
other loan debt.
This option allows you to setup
a repayment plan with extended terms
that can significantly reduce your
monthly payment (depending on the
amount being consolidated).
You can also pay extra each month
to quickly payoff your consolidation
loan.
Get up to four national lenders
to review a consolidation option
that fits your budget. Select the
option that works for you. No obligation.
no
obligation debt consolidation request
form
:
this deb reduction option is available
for debt holders who don't have
a home or who don't have enough
equity in their home to consolidate.
Debt professionals will tailor a
debt reduction plan that works for
you.
This option allows you to setup
a repayment plan with extended terms
that can significantly reduce your
monthly payment (depending on the
amount being consolidated).
no
obligation debt reduction request
form
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Use
this option if you are unable to payoff
your personal loan debt |
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use this option if you find yourself
unable to repay your current debt balances
and want to avoid bankruptcy.
This may be the right option if circumstances
such as unemployment, loss of income,
or other unfortunate event prevent you
from repaying your debts.
This option is also recommended if you
have collection agencies threathening
action. Counseling services can advice
and protect you from adverse action.
credit counselors will be able to discuss
your situation with your debt lenders
to either forgive the debt or structure
a repayment plan that fits your budget.
They will also work with you to establish
a budget that fits your current situation.
you first complete an enrollment form
that authorizes the credit counselor
to discuss your situation.
click
here to start that from our national
list of debt counseling professionals
the credit counselor will contact
your creditors to negotiate a repayment
plan that is significantly less
than you currently pay why?
creditors will welcome partial payment
rather than no payment.
credit counselors will then setup
a monthly repayment plan that works
for you
you will then make your monthly
payments to the credit counselor
who in turns divides the payment
among the creditors based on the
negotiated repayment amount
in most cases, creditors will inactivate
your credit cards to avoid charging
additional debt.
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