How Long Would It Take to Pay Down $50K Debt???
These days debt can happen to anyone; medical bills, layoffs, inflation catching up with your paycheck, etc. Getting out of debt though can feel like being on a hamster wheel. You can spin all day and never get anywhere.
Why? Because you’re making the minimum payment. You might object and say “Hey, what’s wrong with that. At least I’m paying something.” That’s true and kudos for the commitment to pay it off but let’s look at how long it would take to pay off a $50K balance on a credit card with a 24% annual interest rate if you only make the minimum payment.
Drum roll please….
…42 years! And your total cost would be $99,336.04!
Yikes. Why does it take so long if you’re making the minimum payment? Because as you pay down the principal amount each month, the minimum payment will go down too. That means you will actually make less progress each month towards reducing your balance.
Experts say that the smarter thing to do is continue paying your $1500 minimum payment every month regardless of the drop you’ll see in the minimum amount due. If you did this, you could pay that $50K off within five years and save $16,115.17.
If you think you need a little more help or advice about how to tackle those debts or which ones to tackle first, Abri has more than 10 specially-trained staff members that are certified financial counselors. Their services are free to Abri members so you’ve got nothing to lose. Sessions with a counselor are confidential. The first meeting is usually about one hour where they will discuss your financial situation. This is sometimes followed up with a second session to create a spending plan. You can call 815-267-7700 to make an appointment.
Now that’s a sure fire way to get off the hamster wheel!Tags: Credit Card, Debt, Minimum Payment, Pay Down