Debt calculators not only help an individual in assessing his current financial position but also guide one in improving his financial condition in the future. A debt calculator for this purpose may show the following results,
· The total interest that one may need to pay over the period of the loan.
· The time it would take to repay the debt if certain payment is made towards it.
· The calculator may also help one in calculating his payment schedule with different time limit.
· The calculator can also help in determining the time required to repay the debt with various payment installments.
· One’s saving under various repayment plans.
We often neglect the fact that paying only the minimum amount doesn’t reduce the debt burden. The debt repayment calculator for this purpose can give you an idea about the time you may need to pay down the entire debt by only making the minimum payment. For example- an individual with $10000 of debt at an interest rate of 13.5% and minimum payment $136/month would need 156 months to become debt free.
When you have set yourself a deadline to get debt-free, the calculator can help you in planning a proper amortization schedule as well. This is especially helpful to people who are planning to buy house in some year’s period.
There are debt calculators which can further help you in calculating your income vs debt payment in a month to let you know whether your debt situation is alarming. Normally, when your debt to income ratio closes to one, you may need to pay serious attention towards lowering your debt burden.
You may search online for an appropriate debt calculator. Usually these calculators are based on simple mathematic formula, and working knowledge of mathematics is all that is needed to understand its working procedure.