| DEBT MANAGEMENT
| Many of us have too much debt, and we want to reduce or eliminate it. Others use debt responsibly, for example for a mortgage on a house.
However, if you are feeling financially stressed, then you likely have too much debt.
Why is debt difficult to deal with? It is due to interest, which is the cost of borrowing money.
Banks and other financial institutions lend money, and in return the individual that borrows the money pays interest.
In other words: Banks lend money and so they want to stay, as an example to understand throughly this concept think yourself as an investor in houses, the more time you collect rent from them the better. Exactly the same...
If you have noticed the minimum payment they require from you is almost the same amount in dollars of the interest you are paying... meaning.. you will never payoff the debt, and they will keep you working for them forever. It is just that simple.
The rate that individuals pay varies depending upon their credit worthiness and the type of debt. For example, credit cards charge some of the highest interest rates, 8%, 10%, 18% or more up to 32%
If you pay the same amount but under a Debt Management Plan your interest dropped from 25% to 9% then you are seding more money to the principal. By doing this you can save thousand of dollars and get rid of the debt.
See this example: when you send the minimum of 2% of your balance:
CREDITOR INTERSET
| 24.00%
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| DMP PROGRAM
| 9.00%
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| PRINCIPAL OWED
| $25,000.00
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| MONTHLY PAYMENT
| TIME TO PAYOFF (MONTHS)
| TOTAL AMOUNT PAID
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| BY YOUR OWN
| $500.00
| 997
| $100,000.00
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| WITH A Debt Management Plan
| $500.00
| 63
| $31,500.00
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| You save
| $0.00 monthly
| 934 Months
| $68,500.00
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If you send 2.5% of the balance:
CREDITOR INTERSET
| 24.00%
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| DMP PROGRAM
| 9.00%
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| PRINCIPAL OWED
| $25,000.00
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| MONTHLY PAYMENT
| TIME TO PAYOFF (MONTHS)
| TOTAL AMOUNT PAID
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| BY YOUR OWN
| $625.00
| 82
| $51,250.00
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| WITH A Debt Management Plan
| $500.00
| 63
| $31,500.00
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| You save
| $125.00 monthly
| 19 Months
| $19,750.00
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These examples speak by themself, now the question is: where do you want to be?...
The Debt Management Plans brings your account current, after a period of time, by sending your money on time, that means your credit will improve.
As you will be sending more money to the principal your balances will be reduced and your debt to income ratio will improve, which will again work in your benefit with your credit.
A better credit gives you a better life, or the same life but with less money... what about doing some saving for yourself and your family?
If you would like to talk to a friendly financial consultand give us a call or send us your contact information. The call and the analisys is free.
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