New with a question

iVillage Member
Registered: 06-09-2003
New with a question
 3 Mon, 06-09-2003 - 9:11am
I have lurked for a while and learned so much. But I have a question. This may seem stupid to some but I just want to know for sure from someone else that I am thinking right. I know that everyone has recommended some really great sounding books but truthfully I have become to cheap to even buy them. So maybe someone can help me.

The basic premise is that if you create no new debt and pay more than the minimums eventually over time the debt will disappear. Correct?

How do I figure out the calculations to pay off the debts. I know this sounds dumb but the interest is messing me up on trying to figure out how long it will be. I only just realized that our visa bill with a balance of 380 paying the min. they ask is 12 but 5 in interest goes on every month so really we are only paying 7 towards the principal if we make only the min. ( but we haven't been)

I guess I just want to understand our other bigger debts better.

Do I take the balance owing divided by the payment = number of months until 0?

And the interest payment every month is balance x interest rate = interest/mth

then payment - interest/mth = amount coming off principal?

I probally have made this more difficult than it has to be. I am just so confused.

iVillage Member
Registered: 05-08-2003
 In reply to: dragonfly000 New with a question Mon, 06-09-2003 - 9:24am
Dragonfly:

You could do the math yourself, but it's so much easier to have a computer do it. There are many credit card payment calculators on sites online.

I use a computer program though, it's free, and it's called Debt Relief. It's available at www.debtanalyzer.com . You enter your credit account name, balance, rate, min. pymt, Min. pymt percentage etc. It does all the work for you, you can play with debt repayment scenarios, i.e. starting with your current minimum payments and then paying that set amount until payoff (rather than paying their declining minimum due amounts), you can set up payment schedules based on a timed payoff, e.g. pay off by Dec 31 or whatever. You can see the effects of paying an extra \$x dollars per month to your cards. You can use it as a quick calculator, or use the "reports" function to view and print payment schedules, interest saved reports, declining balance reports, etc. There are lots of options. It's a great program, it's free, and you get to have the information at your fingertips since it's sitting on your desktop.

also, I would recommend reading the books, you don't have to go buy them, they are available at libraries.

Hope this helps,

Lorraine

iVillage Member
Registered: 04-19-2003
 In reply to: dragonfly000 New with a question Mon, 06-09-2003 - 1:04pm
Go get Mary Hunt's book at the library. That's what I did. She has wonderful info on saving while paying down debt etc.

Some people start by paying any extra money they have on the lowest balance credit card and than once that card is paid off take that pymt and apply to the next card (in addition to the regular pymt). By paying the lower balance card first it can be a good emotionally boost to see cc paid off sooner rather than later. Yes, you will pay more interest if you are paying off a lower rate card but paying it off might keep you on track for paying your debt. You have to decide what will work for you and what will keep you motivated in paying it off.

Sandra

iVillage Member
Registered: 03-26-2003
 In reply to: dragonfly000 New with a question Mon, 06-09-2003 - 1:38pm
>>The basic premise is that if you create no new debt and pay more than the minimums eventually over time the debt will disappear. Correct?

Welcome and thanks for delurking to post your question! You're understanding of the basics is mostly correct - but you don't pay "more than the minimums" - you pick One, and ONLY one debt to pay over the minimum - and everyone else gets JUST their minimum amount required. If you spread a little extra to everyone, you don't see the progress as quickly as you do when you target just one bill and tackle it while holding all other creditors at bay. Many people give up before they make any serious progress.

Hope this helps! Welcome and keep posting.

Danni

All my best,
Danni