| When the typical
debt-consolidation company advertises that they
can "save you money," what they are most often referring
to is simply a reduction in your total monthly debt
payments -- not a savings in the cost of paying
off your debt (interest charges). Sure, by consolidating
your payments into a single loan, you might be paying
one monthly payment that is smaller than the sum
of your current monthly payments, but if they stretch
your loan out for a longer period of time you could
actually end up paying more interest by consolidating.
This calculator will help you to determine whether
or not consolidating will actually reduce the cost
of retiring your debts.
Instructions: Starting
with the first line of entry fields, enter each
one of your debts, along with their corresponding
principal balances, interest rates and monthly payment
amounts (the last two columns will be filled in
by the calculator). Once you have entered all of
the debts you wish to consolidate, click on the
"Compute Current Debt Cost" button. Next, enter
the consolidating loan's interest rate, term and
any origination fees that might apply and click
the "Compute Consolidation Loan Costs" button.
IMPORTANT: In order
for the this calculator to work, each debt must
have the four left-hand fields filled in (for interest-free
debts enter .001 just to satisfy the required interest-rate
entry). Also, be sure to enter only numbers and
decimal points in the numeric entry fields. Dollar
signs, percent signs, commas and spaces will cause
a JavaScript error.
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