There are times when it seems like no matter what we do, or how hard we try, there just doesn’t seem to be a way to get out from under debt. We are continually paying on credit cards, merchant cards, auto loans, utility bills, mortgages/rent and the list goes on and on. Unfortunately, what many of us don’t realise is that we have done this to ourselves because we didn’t take the time to consider how much interest we would be paying on all those loans and that making minimum payments would be pushing us that much further into debt.

It would be much easier to manage debt if you had some way of actually visualising how much you are actually paying back on interest and a debt management calculator can help you do just that. There are debt management calculators online in which you can enter each of your credit cards and debts with interest attached. You simply enter each debt individually, the amount of interest you pay and then the minimum monthly payment.

Many of these types of calculators have a few different options you can choose before you hit the ‘calculate’ button. You may be asked to choose calculations based on only monthly minimum payments, fixed payments with a totally monthly amount applied to all, or a deadline for being debt free. In the last section you will be asked when you want to be debt-free in terms of years and months. It is amazing to see just how long it will take you to be totally free of debt if you continue to make minimum payments only. Remember, you are paying interest upon interest by letting that debt accumulate.

Debt Consolidation Calculator

Another type of debt calculator may actually be more beneficial if you are trying to consolidate debt into one loan that carries a lower interest rate. If you can qualify for a low interest loan such as a second mortgage on your home, you can compare the difference between what you are currently paying with all those high interest credit cards and a low interest second mortgage. The thing you should be aware of here is that you will be placing a mortgage on your home which means that you could be in danger of being foreclosed on if you can’t make the payments timely; so keep them manageable.

Whether you call it a debt calculator, a debt management calculator or a debt consolidation calculator, the end result is the same. You are looking for a way to get out from under a mountain of debt and are trying to find the quickest way to accomplish this. Any one of these debt calculators will be beneficial if you add a little common sense into the equation. To borrow a cliché, don’t bite off more than you can chew. Even with a debt management calculator you can become overenthusiastic.

By keeping the amount you can afford to pay on a monthly basis realistic, a debt calculator can be a great tool. However, if you aren’t realistic with the amount you can afford to pay there isn’t a debt management calculator on earth that can help you get a handle on your debt.

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