April 19, 2011 | By: Laurie Campbell

Know what you really owe with our Debt Calculator.

Today, I urge you to perhaps surprise yourself by considering what you are really paying out when you calculate interest payments over the lifetime of a personal debt. You can do so easily and quickly by using the free Debt Calculator at www.creditcanada.com.

But first, let me ask you this: Have you ever sat down to determine what you are actually paying out over the full course of a debt?

A lot of people go on their merry way somehow thinking that the full balance owing on a credit card, line of credit or mortgage represents the sum total that will be paid to put the debt to rest. They overlook the fact that over time the outlay for the interest accompanying the debt makes a big difference to the total outlay.

For example, when new homeowners discuss with others the price they paid for a property, they quote the sale price of the home. They do not factor in interest on mortgage payments that usually extend over a long period of time. If they did start quoting what the true cost to them is, they might startle people, including themselves.

You can imagine the conversation. “Well, Bob, I got the fixer-upper for $800,000.” To which Bob responds, “Really? I know somebody who got almost the same property down the street from you for $400,000. Boy, did you get a raw deal.”

Okay, it’s not an exchange you are likely to hear anytime soon. And granted, with fluid rates built into a mortgage deal, the sum total of the long-term pay out cannot be precisely gauged. But you get my point. Smart personal money management means being abundantly aware of what the necessities and pleasures in life are really costing you. 

Generally, most of us are much more aware of true debt costs for big-ticket items like homes and cars. Where we often slip is with lesser debts, frequently pertaining to lines of credit, and especially credit cards.

As I say, it’s not hard to figure this stuff out. Visit our Debt Calculator. Follow the Debt Calculator instructions from there. By entering the required information, you will see the difference your payment can make on the lifetime of your debt.

I calculate that knowing the true cost of debt brings a greater appreciation for the value of your hard earned money.


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