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How to Calculate Your Debt Payoff

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When you pay off debt, you open up options for yourself. You improve your cash flow, so you can stop living from paycheck to paycheck; you free up money so that you can buy the things you need and want to live a more productive and engaged life; and you put yourself in a position to save more money for larger purchases or a more comfortable retirement.

But how do you do that? Paying off debt is difficult, right?

Well, paying off debt may not be easy but it is actually very simple. It may take very little time or a relatively long time, depending on how much debt you have, but figuring out how to do it will take just a moment. Below, you will find the resources you need to get started.

 

FIRST, watch this video to learn the basics of a simple system for paying off your debt.

 

 

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SECOND, develop a payoff strategy based on what you learn in the video, taking into consideration your income and other expenses.

 

THIRD, use our “Meet a Debt Payoff Goal” calculator to find out how long it will take to pay off your loans using your strategy. You can also use the calculator to consider other strategies.

 

Eliminating debt is a great first step to taking control of your finances. Once you’ve got them under control, you’ll want to keep them under control, consider why you are in debt and how you can think more clearly about your finances and remain debt-free.

Also, if you have a mortgage, you can pay your mortgage faster AND save a lot in interest charges by making principal payments.

As you pay off your debt, your debt to income ratio will improve, which will make it easier for you to get approved for a loan, and your overall credit rating will rise. In the end, you’ll find that you have a lot more money to work with, play with, and put toward your retirement.

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Heidi White

About Heidi White

Heidi White is the content and communications manager at VSECU. She is responsible for communicating information and ideas through the written word for the credit union’s internal and external audiences. Her passion is helping people live more joyful lives through timely, useful, and compelling content. Heidi lives in Barre, Vermont.
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