Debt Consolidation and Personal Loans
Are you still looking to get out of debt using debt consolidation and personal loans? Did you think about getting out of debt using goals and plans? If not, in the paragraph below is an example of getting out of debt using the debt that has the lower balance first. This will help you understand and set goals and see progress as your debts decrease.
Take note of the plan below that will show you how to get out of debt. Therefore, you will more about debt and understand more about debt consolidation and personal loans.
In order to get out of debt, Jack will pay the lower balance first in this example. The minimum payments are still being made to the other debts while focusing on one debt at a time.
CC = Credit Card
CC 1 = $500 $10 Minimum payment - 1st debt to wipe out.
CC 3 = $750 $15 Minimum payment - 2nd debt to wipe out.
CC 2 = $1000 $20 Minimum payment - 3rd debt to wipe out.
Personal Loan = $8000 $140 Minimum payment - 4th debt to wipe out.
Car Loan = $10000 $225 Minimum payment - 5th debt to wipe out.
In the provided example, Jack decided to pay $100 more per month. Therefore, Jack uses $100 extra a month toward the lower balance of a debt.
When one debt is paid off, Jack would draw a line through the debt with the word DONE at the end of the line. This helps to keep track of the progress. The minimum balance debt plan would now looks like this. CC 1 has a balance of $500 and this is the debt that Jack is going to concentrate on paying off first.
Jack applies the extra $100 to CC 1, plus the $10 which is the minimum payment. The payment for CC 1 is now at $110. While applying this process, Jack would still pay the minimum payments on all the other loans as well. When CC 1 is paid off, Jack would then take the total of $110 and apply this to CC 3.
The balance for CC 3 is $750 and it also has a minimum payment of $15. Therefore, CC 3 has a new payment of $110 + $15 = $125. While applying this process, Jack would still pay the minimum payments on all the other loans as well. When CC3 is paid off the next debt to knock out will be CC2.
CC2 has a balance of $1000 with a minimum of $20. The new payment for CC 2 is $125 + $20 = $145. While applying this process, Jack would still pay the minimum payments on all the other loans as well. Jack would pay this amount until the debt is paid off and then move to the next debt.
While focusing on getting out of debt, remember to take one day at a time and keep a positive attitude. Keep in mind that you can accomplish this process, but it is really up to you. Now that you have learned about getting out of debt using the lowest interest rate, you may not need debt consolidation and personal loans to help you any more.
Debt Option Part 1
Did you miss part one of Personal Loans For Debt Consolidation?
Consumer Debt Articles
Need to know more about consumer debt consolidation?
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