Let’s face it, not all of us are born accountants. A lot of us may not be financial gurus or analysts who can simply calculate interest rates and monthly amortizations in the blink of an eye. It is because of this that managing all of our existing loans can be such a challenging task. Not only that, paying off several loans with different interest structures and varied payment dues, can be quite confusing as well as may financially rip you off.
So to better manage your current loans and make sure you have a full-proof plan to pay them off within a period of time, you might want to consider consolidating all of your loans. You might just be better off making one payment for all of your loans at a much lower interest rate. However, the only way to know if this is the route you should take is to use a consolidation loan calculator.
Using this calculator can help you solve your debt problems by coming up with a payback plan that would best suit your budget. Once you are sure you would consider the approach of loan consolidation, you will need to do the following steps:
Step 1 – Gather all your bills together and make a list of all of these. Include in this list the amount you owe, the interest you pay on a monthly basis and when the payment is due.
Step 2 – Figure out what options to take as you consolidate your debts. You have two alternatives: home equity loans and personal loan.
Step 3 – If you consider the home equity loans, you must be sure of your home’s equity first. Chances are, if you take this option, you will get a lower interest rate. The only negative side of this is that if you are not able to make the regular payments, you might be faced with foreclosure warnings and may even eventually lose your home.
Step 4 – If you consider personal loans as an option to consolidate your debts, you must brace yourself for higher interest rates than taking a home equity loan. This is because there are no recoverable assets to back up your loan in case you defer in your payment.
Step 5 – Once you have all the necessary information with you, the consolidation loan calculator will help you determine monthly payments on your new loan. With this tools you can foresee whether this is a reasonable amount that you can set aside each month to pay off your debt. And the good thing about this is that your consolidation loan calculator will help you determine the savings you make each month, the interest saved as well as the amount that your save for the duration of your loan.
Use this tool to help you gain the advantage when consolidating all of your debts. Remember that when you use this loan calculator, you will have a better idea where to get the best savings before you actually go through the process of consolidating all of your loans.