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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). 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 your loan stretched
out for a longer period of time you could actually end
up paying more interest by consolidating your debt.
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 an error.
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