We all feel shackled by our loan debts. For each seemingly never ending burden that you’re judiciously paying off each month there must eventually be a light at the end of tunnel? Right? Want to predict your debt-free future? Would you like to know exactly when you’ll be debt-shackle free? Then you need to work out exactly how much your debt is costing you per day. Recognizing the effect debt has on your day-to-day expenses can be a real motivator to get yourself out of those shackles ahead of schedule. And all you need is this simple equation;
Loan Amount x Interest Rate = Your Debt Cost Per Year
This figure is how much your debt accrues each year that you’re still making payments on it. And if you weren’t shocked by that then it may surprise you further to learn that those minimum payments you’ve kept on top of regularly aren’t even touching the principal balance of your loan. You’re merely making payments into the interest amount each month.
Now, let’s go one step further now and see just how much your debt costs you on a daily basis. Divide the number above by 365 and prepare yourself for a fairly awful shock.
Your Debt Cost Per Year ÷ 365 Days = Your Debt Cost Per Day
Okay, the next step is to do this for all your credit debts, it’s best to get this information out all in one go to be able to move forward; as they suggest rip the band-aid off quickly. We agree to the interest rates on top of the loan balance just as part of the commitment we take on for borrowing money. We don’t fully realize the real implication of interest rates until we sit down and actually look at the numbers. Use figure as motivation to free yourself from debt—think of the savings you can make on a daily basis by getting out from under it all together. Speak to us at Sperity for more information about your debt management options and get the key to your shackles today!