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Understanding Your Current Debt
Position
Don't Pay Someone Else Thousands, Do It Yourself!
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
Check
Out The "Credit Secrets Bible"
Home loan has an amount of
$36,000 with %14 of interest rate, $3,500 for the credit card with
%18 of interest and $21,000 for the car loan with %10 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.
This resource is not written to
simply explain theories; you will learn how to calculate your debts
and how to recreate a payment plan to avoid huge interest rates and
hence cutting down your debts and/or becoming debt free.
Now, take your calculator,
have a pen and paper handy, and use these examples
to apply to your own situation. You will notice how drastically
you can cut down your interest and save time and money!
Let’s summarize these
debts:
|
|
Home
Loan |
Credit
Card |
Car
Loan |
|
Amount: |
$36,000 |
$3,500 |
$21,000 |
|
Interest: |
14% |
18% |
10% |
|
Monthly |
$500 |
$100 |
$250 |
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 + $250)
-
$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 your debts.
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, your total
payment will be $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!
|
Name |
Amount |
Interest |
Payment |
Interest
Paid |
% of
interest |
|
Home
Loan |
$36,000 |
%14 |
$500 |
$42,996.48 |
119% |
|
Credit
Card |
$3,500 |
%18 |
$100 |
$1500.05 |
43% |
|
Car
Loan |
$21,000 |
%10 |
$250 |
$15,269.57 |
73% |
- 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.
Total: $60.500
Interest: $59.766.10
Can you imagine paying interest
that equates to the same amount as what you have borrowed?
Unbelievable!
You will be paying for this
$120.266, by simply recreating a repayment plan (following steps of
Chapter 5), 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.
Don't Pay Someone Else Thousands, Do It
Yourself!
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