Do you realize that if you owe $5,600 on a credit card
with a 18% interest rate, and you only make $100 payment
each month that you will owe on this account for 124
months and pay a total of $6,708.54 in principle and
and paying % 54.5031 of interest for the payment?
Real examples are usually the best tool to demonstrate a
theory. Let’s take few examples:
You have 3 debts:
– Home Loan
– Credit Card
– Car Loan
Home loan has an amount of $36.000 with of interest
rate, $3500 for the credit card with of interest and
$21.000 for the car loan with of interest.
Most people unfortunately, do not summarize their debts
correctly. They simply follow the debt period/time and
payoff their debts without having a clear status of what
is really happening behind the scene.
As an advice, take your calculator, have a paper and do
at the same time these examples and you will notice how
drastically you can cut down your interests and save time
Let’s summarize these debts:
Summary for your current debts:
– $60.500 is the total amount of the debts we have.
($36.000 + $3500 + $21.000)
– 12.8% is the interest rate we are paying. (Weighted
average for 14%, 18% and 10%)
– $850 is your current monthly payment. ($500 + $100 +
– $647.50 is the amount of interest you are paying
each month. ($60.500 x 12.842% / 12)
– 76.1% is the percent of your monthly payments on all
If you continue to make the current minimum payments on
all your debts, you will be in debt for:
13 years and 2 months
During this time you will pay a total of $59,766.10 in
interest which is 98.7% of your current debt!
Can you imagine this huge number! 98.7% of interest!!!
This is the current debt status; this is the nightmare if
you do not follow a debt free plan. Shocking numbers!
Your Home loan needs 13 years and 2 months to be paid off
Your Car loan needs 12 years and 2 months to be paid off.
Your Credit card needs 4 years and 3 months to be paid off.
Can you imagine paying interest approximately the same
amount of owe? Unbelievable!
You will be paying for this $120.266, by simply
recreating a repayment plan
you will save this money! And save time too! And make
life easier and let the dream come true!
If you were to pay off your debts by paying either the
minimum amount or the payment amount of a 15 year
amortization, you would have to pay a total of $59,766.10
in interest and would not pay off your debts for 13 years
and 2 months.