Tilted Forum Project Discussion Community - View Single Post - Loan Formula discussion from "Ask A Loan Officer" (Thread split by request)

Yakk · 04-23-2004, 06:01 AM

With multiple cards, you want to focus on one at a time.

Take your "debt service per month" budget.

Cut off "carrying" amounts for most of your cards. Ie, pay the interest every month on every card (or, maybe less if your card is nowhere near it's limit?) Simularly, if you have a negotiated repayment on a debt, work this in here.

After this, you better have money left over, or you are in trouble.

Now, take the highest rate card. Take all the left over "debt service per month" money, and do the math on this card. That will tell you how long you have to pay it off.

Then, work out what your debt on all your cards will be at the point where you pay off your first card. Repeat the above, paying off another card.

It gets more complicated when your rates are going to change: for example, you have a card that will go up in rate in six months. What you can do here is solve for the first 6 months, then figure out your debt on all cards 6 months from now, and then solve for after 6 months, if that makes sense.

Damn, that's alot of work. =/ I'd try it on a spreadsheet.

Do you know how to figure out the answer to:
You have a credit card at X% interest and D debt. You put P dollars a month into it. After N months, how much debt do you have on the card?

04-23-2004, 06:01 AM	#12 (permalink)
Yakk Wehret Den Anfängen! Location: Ontario, Canada	With multiple cards, you want to focus on one at a time. Take your "debt service per month" budget. Cut off "carrying" amounts for most of your cards. Ie, pay the interest every month on every card (or, maybe less if your card is nowhere near it's limit?) Simularly, if you have a negotiated repayment on a debt, work this in here. After this, you better have money left over, or you are in trouble. Now, take the highest rate card. Take all the left over "debt service per month" money, and do the math on this card. That will tell you how long you have to pay it off. Then, work out what your debt on all your cards will be at the point where you pay off your first card. Repeat the above, paying off another card. It gets more complicated when your rates are going to change: for example, you have a card that will go up in rate in six months. What you can do here is solve for the first 6 months, then figure out your debt on all cards 6 months from now, and then solve for after 6 months, if that makes sense. Damn, that's alot of work. =/ I'd try it on a spreadsheet. Do you know how to figure out the answer to: You have a credit card at X% interest and D debt. You put P dollars a month into it. After N months, how much debt do you have on the card? __________________ Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.