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 Loan
Consolidation
Calculator
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Getting a
consolidation loan can do more than payoff
your debt. You can create a sizeable nest
egg by investing all or a portion of your
monthly payment savings. After a few years
the results may surprise you! Use this
calculator to see the results of paying off
your debt and investing your payment
savings. |
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Definitions
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Credit cards
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Enter one total credit card debt and its average interest
rate, or press the "Details" button to enter up to 10
credit card accounts, one on each line.
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Car loans
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Click on the "Details" button to enter any car loans you
may have. The details page is designed to let you enter
your current monthly payment, the term (in months), the
starting balance and the number of months you have left.
It then calculates your outstanding balance and interest
rate. You can enter up to three loans.
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Other loans
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Click on the "Details" button to enter any other loans you
may have in the details page. This page is designed to let
you enter your current monthly payment, the term (in
months), the starting balance and the number of months you
have left. It then calculates your outstanding balance and
interest rate. You can enter up to six loans.
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Balances
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Your total current balances for your credit cards, car
loans and investment loans.
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Interest rates
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The average annual percentage rate you pay. This interest
rate is calculated for each of the categories of debt you
have including credit cards, car loans and other
installment loans. For credit cards, the rate you enter is
used to calculate the interest on all future credit card
payments. The length of time to pay off this credit card
may be much greater than calculated if you enter a low
promotional interest rate that is only good for a short
period of time.
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Payment
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This is your initial monthly payment. For credit cards, if
you checked the "use credit card minimum payments" box on
the details page, your monthly payment is calculated as 2%
of your current outstanding balance. With the "use credit
card minimum payments" box checked, your monthly payment
will decrease as your balance is paid down. This can
greatly increase the length of time it takes to pay off
your credit cards. Uncheck this box to enter your own
monthly payment that will remain the same until your
balance is paid in full.
(We calculate your minimum monthly payment as 2% of
your current outstanding balance. While your actual
minimum monthly payment may be slightly different, say 3%,
this is one of the most common methods used by credit card
companies to calculate minimum payments.)
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Loan balance
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This is the total loan amount you are planning on
receiving. This amount must be at least equal to your
total outstanding debt plus any fees. If you choose to
receive a larger loan amount than your outstanding debt,
plus any fees, the additional amount is added to the
starting balance of your investment.
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Loan term
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The length of time you will repay this loan. The
investment timeframe for this calculator also uses the
loan term. This can be from one to 30 years.
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Loan interest rate
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The annual interest rate you are charged for this loan.
This calculator assumes that your payments are made
monthly and that interest is compounded monthly.
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Percent to invest
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This is the percentage of your monthly payment savings you
wish to invest. Any remaining payment savings is used to
repay your loan. For example, if you have a monthly
payment savings of $100 and choose to invest 75%, $75
would be invested and $25 would be an additional amount
applied to your loan balance.
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Rate of return
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This is the annual rate of return you expect from your
investment. The actual rate of return is largely dependent
on the type of investments you select. ASX 300 has
returned an average of 10.64% annually since inception.
Savings accounts at a bank pay as little as 1% or less. It
is important to remember that future rates of return can't
be predicted with certainty and that investments that pay
higher rates of return are subject to higher risk and
volatility. The actual rate of return on investments can
vary widely over time, especially for long-term
investments. This includes the potential loss of principal
on your investment.
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