Have you ever worried about your debt levels? Do you have multiple credit card balances, personal loans, and a lackluster savings account? Are you concerned about being able to meet all of your financial obligations? Consolidating your debt into one single payment may be an option suitable for you. Here is how to use a debt consolidation calculator to help you determine if this is the right option for you.
How Does a Debt Consolidation Calculator Work?
A consolidation calculator essentially breaks down what you owe into smaller chunks of information that are easier to handle and understand—so you can see how long it will take you to pay down your debt using different strategies.
This way, you can make an informed decision about which strategy is best for your needs and goals. The calculator considers all of your outstanding debts and calculates the amount of interest you are paying on each of them.
It then uses this information to calculate the total amount you would pay if you consolidated your debts into a single monthly payment at the current interest rate on your credit card or other unsecured debt.
Individuals who have multiple credit cards with high-interest rates or other types of unsecured debt may find that they are paying more in interest than they could save by consolidating their debts into a single monthly payment.
This is especially true for people with credit scores below 700, which is considered bad credit because lenders don’t want to risk lending money to those with low scores.
However, even those with good credit can benefit from using a debt consolidation calculator because it will help determine if consolidating all of their debts into a single monthly payment will save them money in the long run. You can always get back to us for more debt consolidation advice.
How Do You Use a Debit Consolidation Calculator?
There are several kinds of debt consolidation calculators, but basically, they all have a common purpose.
Here is how to use this tool for debt consolidation:
- Input Your Total Debt
The first step in using the debt consolidation calculator is entering information about your existing debts. Use the ‘Add’ on the tool’s sidebar to add as much information as possible about the current for the most accurate results.
- Fill in Your Interest Rate and APR
These are both common terms that relate to how much your debt will cost you over time, including interest and fees. These two concepts are often confused—APR is the annual percentage rate, while interest rates reflect the percentage of interest charged on your debt each month. You should find these numbers on any bills associated with your debt.
- Save Or Print Your Results
This is where you’ll be able to see how much money you’ll save by consolidating all of your debts into a single monthly payment with a lower interest rate—and what that lower monthly payment could look like!
What Features Should You Look for in a Debt Consolidation Calculator?
There are numerous debt consolidation calculators online, but if you’re looking for a debt consolidation calculator that does everything, here are some features to look for:
- A comprehensive set of features. A good debt consolidation calculator will include your current income, monthly expenses, other debts, and credit score, among other factors.
- A reputation for accuracy. Look at reviews or testimonials from people who have used the calculator to get an idea of their experience.
- Compatibility with other finance tools. If you use a financial app, check to see if it’s compatible with the debt consolidation calculator so you can keep all of your financial information in one place.
These debt consolidation calculators make finding the right plan for you quick and easy, often allowing you to apply online in a matter of minutes. If you wish to consolidate with companies, use the calculator to compare their offers.