How Emma Saved $12,000 In Credit Card Interest Payments And Was Debt-Free Six Years Sooner
November 18, 2015
Emma would often come to her job with bags underneath her eyes. Her colleagues were constantly asking her if things were alright at home and if she was okay. Emma did not want to be sick anymore. She was also tired of being asked questions about her personal life. Emma had several sleepless nights, and the effects of that showed on her face.
There were several things that caused Emma to have trouble sleeping at night. She had problems at both home and work. She also had credit card debt that she was struggling to pay. Emma’s credit card balance was $10,000.
Emma did not think that she would end up with credit card debt because she had a good-paying job and a good credit score. She paid for a Caribbean cruise that she took with her husband with her credit card. She thought that she would be able to pay the balance off quickly. She also thought that she would pay the balance off before any interest was charged. However, she had to pay for a leak and unexpected dental expense.
Emma was carrying a credit card balance that she was struggling to pay off. She felt stressed, depressed and out-of-control. Although she made the minimum payments every month, it did not seem to have much of an effect on the overall balance.
Emma felt like she did not have any control of her finances because of her credit card debt. She felt as though she was in a boat with no anchor. When you take a look at the numbers involved, it is easy to understand how difficult Emma’s situation was. The credit card balance was $10,000, and the annual percentage rating was 19.99.
The minimum payments on Emma’s credit card totaled out to be $200 per month. The minimum payment would decrease as the balance on the card decreased. It would take Emma about nine years to pay off the card. She would also end up paying a total of $11,191.
Emma read a post from Borrowell while she was at work. She learned that people with good credit would be able to get a loan from Borrowell. She also found out that getting a loan with a low interest rate would help her get out of debt much faster. Below is a list of some of the key things that Emma learned:
Revolving Credit Vs. Term Loans
Emma learned about the differences between term loans and credit card. She found out that revolving credit is a great option if it is used responsibly and is paid off before the interest kicks in. However, if you have a term loan, then the payment will remain the same for the duration of the loan. You will always know how much money you will be required to pay on the loan each month.
You Can Get Out Of Debt Faster With Higher Monthly Payments And Lower Interest Rates
One of the reasons that Emma decided to take out a loan because she found out she could get out of debt quicker. She had the option of selecting a three or five-year term. She selected a three-year loan, which allowed her to get out of debt three times faster. She paid about $1,500 in interest.
Emma was paying about $200 per month in credit card payments. She took out a $10,000 loan with a minimum payment of $318. She managed to get out of debt in just three years. If she would have continued to make the minimum payments on the credit card, then it would have taken her nine years to pay off the debt.
Emma had to live on a tighter budget so that she could make the higher payments every month. However, making the higher payments and budgeting are definitely wise moves. Emma is now debt-free.
If you are dealing with credit card debt, then it is important to research and find out about the options you have. There are options that will not only help you reduce your debt, but they will also help you save money on interest. Borrowell is a company that is committed to helping you reduce your debt faster.