Should I Refinance My Mortgage?

Should I Refinance My Mortgage?

Should I refinance my mortgage?

If you can get a lower interest rate, you should refinance your mortgage- right?  Not necessarily.  Refinancing a mortgage costs money.  The bank that issues the loan to refinance your mortgage charges origination fees that can amount to thousands of dollars.  If you don't end up staying in your home long enough, you can easily end up losing money on a mortgage refinance.

Another unexpected cost of refinancing is that it can extend your payments further into the future, increasing the amount of time you are paying interest.  For example, if you have been paying on a 30 year mortgage for 3 years and then get a new 30 year mortgage in a mortgage refinance, you'll be paying interest for 3 more years than if you kept your original loan.  Even if the interest rate is lower, this can still add up to more total interest payments over time.

When Can I Save Money If I Refinance My Mortgage?

Whether or not you will save money by refinancing comes down to the details: how much lower is the interest rate?  How much are the loan origination fees?  How long will you stay in your house?  A mortgage refinance calculator can help you decide if you should refinance your mortgage.

Mortgage Refinance Calculator
Image Source: Dr. Penny Pincher

Using a mortgage refinance calculator will let you determine how much money you can save over the life of the mortgage.  The calculator above adds your refinance loan fees to the refinance mortgage amount- which is how most people cover the refinance loan fees.  You can see the affect of the lower interest rates on a refi in the form of lower monthly payments.  These lower payments save you money every month- until you reach the point where your original mortgage would have been paid off.  The calculator above calculates the total cost of your original mortgage and your refinance loan, so you can check the total cost of each and see if you would save money overall by refinancing.

You can also learn how long it will take for your savings on interest every month to cover the refinance loan fees.  For example, if it would take 24 months for your monthly savings to cover your refinance loan fees, you would need to stay in your house at least 24 months for a refinance to make sense.  If you sell your house before you reach the point where your interest savings have covered your refinance loan fees, then you would loose money by refinancing.

Reasons to Refinance a Mortgage

The main reason people refinance a mortgage is to get a low interest rate and save money on interest payments.  If you can pay less and get the same house, why not do it?  If you can get a lower monthly payment, you can use the money to pay down high interest debt, such as credit cards.  Or, you can keep the same payment and pay off your mortgage years earlier with a refinance.  These are good options to have.

Another reason people refinance a mortgage is to get out of a variable interest rate mortgage, or balloon mortgage.  Some mortgage loans have interest rates that can change over time.  You can sometimes get a lower interest rate in the short term, but there is a risk that interest rates will rise and you will end up paying more.  Most people who plan to stay in their home for a long time prefer the security of a fixed rate mortgage.  This means that your principal and interest payment will never go up.

I Decided Not To Refinance My Mortgage

I recently investigated refinancing my mortgage, but it turned out that it would pretty much be a break-even proposition.  It wasn't worth the effort to complete the mortgage application and pay fees to refinance.  My mortgage interest rate was already very low, so refinancing would not improve the rate by much at all.

The interest rate you have on your current mortgage is largely dependent on when you applied for your mortgage.  Mortgage interest rates move up and down all the time, and some years the prevailing interest rate is higher or lower than others.  If you got your original mortgage when interest rates happened to be low, there may be no benefit to refinancing.  However, if you ended up with a higher rate, you could save a lot of money by refinancing.

The only way to know if you can save money by refinancing your mortgage is to check current rates and see how much you could save.

Recommended Reading:
Credit Card Consolidation Loan Calculator

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Mortgage Refinance Calculator

Mortgage Refinance Calculator

How much could you save if you refinance your mortgage?  A mortgage refinance, also known as a "refi", means that you get a new mortgage for your home at a lower interest rate.  This mortgage refinance calculator shows you how much you will save based on the interest rate of the mortgage refinance loan.

Enter the information for your current mortgage loan information and the interest rate for the mortgage refinance loan in the calculator below and click "Compute" to see how much you can save by refinancing.  Example entries have been filled in for a 100,000 mortgage balance with 30 year term, monthly payment of $537 that started 3 years ago.  The example mortgage refi has an interest rate of 3% and an origination fee of $2000.  Simply change the example information to the information for your mortgage.

Mortgage Refi Calculator by Dr. Penny Pincher Will you save money if you refinance your mortgage? Copyright (c) 2014. All Rights Reserved http://pennypincherjournal.blogspot.com

INPUTS

Enter Current Mortgage Balance ($):

Enter Term of Current Mortgage (years):

Enter Current Monthly Payment (Principal and Interest) ($):

Enter Time Since Current Mortgage Started (years):

Enter Interest rate for Refinance Loan (%): *This interest rate is for the new refi loan, not the current loan!

Enter Origination Fee for Refinance Loan ($): *This is the cost the bank charges to finance the new loan

Cost of Current Mortgage- now to end ($):

RESULTS- Analysis of Mortgage Refinance

New Monthly Payment ($):

Savings on Monthly Payment ($):

New Loan cost (now to end) ($):

Time to break-even on refi (mo):

Total savings over life of refinance loan:

Mortgage Refinance Calculator Instructions

• The current mortgage balance is the amount that you currently owe on your mortgage.
• The current mortgage term is the total duration of your current mortgage, typically 30 years.
• The current monthly payment is the amount of your principal and interest payments on your current mortgage.  Your total monthly mortgage payment includes Principal, Interest, Taxes, and Insurance.  For this calculation, you need the amount of principal plus interest only.  If you don't have this information handy, don't worry.  You can calculate your principal and interest payment if you know the mortgage amount and interest rate using the calculator below:

Mortgage Calculator by Dr. Penny Pincher Calculate your Mortgage Principal and Interest Payment Copyright (c) 2014. All Rights Reserved http://www.pennypincherjournal.blogspot.com

INPUTS

Enter Initial Mortgage Balance ($):

Enter Term of Current Mortgage (years):

Enter Interest rate for Mortgage (%):

RESULTS

Principal+Interest Payment ($):

You can use this mortgage calculator to calculate the principal + interest payment on your current mortgage using the original mortgage balance and current mortgage interest rate.

If you want to see how Principal, Interest, Taxes, and Insurance contribute to your monthly mortgage payment, check out this mortgage calculator.

• The time since your current mortgage started is needed to determine how much you can save by refinancing.  You can input decimal values, such as 3.25 years.
• The next entry is the interest rate for your new refinance loan.  You can look up current refinance rates in newspapers or on the internet.
• It costs money to get a mortgage loan-this is known as the origination fee.  The Mortgage Refinance Calculator determines how long it will take to break-even on a refinance using the origination fee and your monthly savings.  In this case, the break-even time means how long it takes your monthly payment savings to cover the refinance origination fee.  The refinance loan origination fee is added to the refi loan amount in the calculator.
• Check the bottom line of the calculator: Total savings over life of refinance loan.  If a negative value is shown for savings, you will loose money over the life of the loan by refinancing!  
• One way this can happen is if you nearly have your current mortgage paid off.  Let's say you are paying $500 per month and have 5 years left to pay off your mortgage.  If you refinance you could get a new 30 year mortgage and save hundreds of dollars per month on payments- but you will be making payments for 30 more years rather than 5.  
• So even if the refi interest rate is lower, continuing to make payments longer can still add up to more money paid on interest.  You can pay more by refinancing in a scenario where you have almost paid off your original loan.
• Note that the calculator assumes you will have the same term for the refinance that you had for the original mortgage.  For example, if the original mortgage was a 30 year loan, the calculator uses a 30 year term for the refinance loan.

Saving Money with a Mortgage Refinance

As you can see when trying out refinance scenarios, it takes some time to break-even on the refinance to cover the cost of the refinance loan origination fee.  Since your interest rate on the refinance loan is lower, you'll save money every month.  It will take months of interest rate savings to cover the refinance fee- perhaps even a few years, depending on interest rates.

Getting a mortgage refinance makes sense only if you will be staying in your current house for awhile.  You can use the calculator to see how long you would need to stay in your current house for a mortgage refinance to make sense.

Another good use of the calculator is to see how much money you would actually save by refinancing before going through the effort- and fees- to get a new mortgage loan.

If you are interested in how mortgage payments are calculated, the mortgage payment formulas used in the calculators are from the Mortgage Professor.


Recommended Reading:
How to Become a Millionaire- The Millionaire Calculator

Credit Card Consolidation Loan Calculator

Penny Pincher Journal

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Home Insulation: Save Money on Utility Bills

Home Insulation- Add Insulation to Your Home

Years ago, I bought an old farmhouse built in the 1860's era.  This was a big two story house.  When I bought it, it had 19 windows- all with single pane glass.  It had no insulation in the walls.  There was no insulation in the floors, either.  The attic had a thin layer of mineral wool insulation.

A Thin Layer of Mineral Wool in the Attic was the Only Insulation in the House!
Image Source: Øyvind Holmstad CC-1.0 Universal Public Domain Dedication

We moved in over the summer.  As summer turned to fall, the furnace started running.  Then the furnace stopped heating the house, and we realized that we had emptied the propane tank already!  This was a 300 gallon tank, and propane was $1.29 per gallon at the time.  That first winter, there were times we had to fill the propane tank more than once per month.

I quickly realized the value doing a home insulation project.  Here are the home insulation improvements that we made:

Windows- Double Pane Replacement Windows with Argon

We replaced 18 of the 19 windows with double pane windows charged with argon.  The argon layer between the glass provides insulation value in the windows.  Heat easily moves through glass, but the gas layer between layers provides insulation value.  This was a do-it-yourself insulation project.  We ordered the windows 3 or 4 at a time and replaced a few on weekends until all but one had been replaced.  We used an interior plastic layer on the one large window single pane window that we did not replace.  I would estimated that installing each replacement window took a couple hours once we knew what we were doing.  We added fiberglass insulation to fill any voids and caulked around each replacement window.

Doors- Replace Wood Entry Door with Insulated Door

We replaced one old hollow core entry door with a steel door with Styrofoam insulation inside. The old door had cracked and had places where you could see light through it.  We placed large sheets of Styrofoam over two unused exterior door.  We kept one original solid wood entry door with a single pane glass window.  We added weather stripping to make a good seal around the two doors we kept as functional entry doors.  Improving insulation around the doors was also a do-it-yourself insulation project, this can be done in a few hours.

I Used Styrofoam Panels to Cover Unused Entry Doors, Saving Energy
Image Source: Dr. Penny Pincher

Blocking Drafts

Unused Single Pane Basement Window Covered with Styrofoam Insulation to Block Drafts
Image Source: Dr. Penny Pincher

There were a couple small cracked single pane windows in basement.  I blocked these with Styrofoam from the inside and sealed them in with spray foam insulation.  I also applied caulk and spray foam insulation around openings for utility pipes, dryer vent, etc. that were letting air exchange directly between inside and outside the house.  Up next was caulking around windows from the outside to fill any gaps.  Blocking drafts is one of the most effective ways to lower your utility bill, and this is an easy do-it-yourself project.

Use Caulk to Fill Gaps in Siding and Around Windows to Stop Drafts
Image Source: Dr. Penny Pincher

You can use an Infrared thermal leak detector to find drafts or cold spots on walls or around windows.  Just point scanner at your wall and view the readout on the IR scanner.  This will tell you where you need to add more insulation or stop drafts to save on your utility bill.  The Black and Decker model has a color-coded light that illuminates the area of your wall that is hot or cold as you scan your wall.  This makes it easier to find drafts and cold spots since you can concentrate on the wall and not focus on the temperature readout all the time.  When a red (hot) or blue (cold) spot is indicated, you can look at the temperature display to see the exact temperature of hot or cold spots.

Walls- Blow in Insulation

The interior walls of this house were plaster, and we wanted to keep the original plaster.  So to  insulate the walls, we worked from the outside.  We hired a contractor to install blow in insulation.  The contractor drilled holes through the siding and used a blower to fill the space in the walls with blow in insulation.  The holes in the siding can be plugged with wood plugs.  We just taped over the holes since we planned to replace some of the siding and paint in the spring.

The blow in insulation we used was made from recycled materials.  The main component was recycled newspaper which was ground up into small pieces.  Since paper is flammable, the insulation is treated with chemicals to make it non-flammable and suitable as a building material.  Hiring a contractor to blow in insulation cost about $2000.  I was upstairs playing with my kids on the cool day when they were blowing in the insulation.  I could actually feel the house warming up as they added the insulation in the walls!

Attic- Add Fiberglass Batts

The insulation in the attic between the joists was a loose fill material that I believe is called mineral wool.  The layer of insulation was only a couple inches thick.  I bought some unfaced R-30 fiberglass batts and added this over the top of the existing insulation.  Use unfaced fiberglass insulation when adding another layer of insulation if there is already a vapor barrier under the first layer.  The vapor barrier prevents moisture from condensing when water vapor moves from a heated space to an unheated space.

This additional insulation made a noticeable difference, especially since the bedrooms were upstairs and the thermostat for the furnace was downstairs.  It is often said that adding insulation in you attic is the most effective place to insulate to save on utility bills.  Adding fiberglass batts to the attic was a do-it-yourself insulation project that took a single day to complete.

Use Unfaced Fiberglass Batts to Add More Insulation Over Existing Insulation
Image Source: Dr. Penny Pincher

Floors- Add Fiberglass Rolls

This project was a little more challenging.  The old part of the house had a basement with easy access to the ceiling to install insulation.  However, the new part of the hose had a crawlspace underneath, and only a foot or so of clearance in some places.  Luckily, I like to save money so much that I didn't mind crawling under there in the dark to install some rolls of fiberglass insulation.  I used faced R-15 fiberglass rolls with craft paper vapor barrier.  The vapor barrier goes against the warm surface to prevent water vapor from condensing when it moves from the warm interior of the house to the cold exterior.  This was a do-it-yourself insulation project.  I worked on it a few evening a week for a month or so.  Since there were cold drafts blowing in the basement, this helped keep the floors much warmer.

Use Faced Fiberglass Batts or Rolls for the First Layer of Insulation to Provide a Vapor Barrier
Image Source: Dr. Penny Pincher

Home Insulation- How Much Can You Save on Utility Bills?

The good thing about doing a home insulation project is that it keeps paying back all the time.  In winter, you save money on heating bills every heating day after you install the insulation.  In the summer, you save on cooling every day after you install the insulation.  We spent a total of about $3000 on adding insulation to our old house.  Since our heating bills were so high, I would say that the payback period for this investment was less than 3 years.

Adding insulation to your house will save you money on utility bills, make your house more comfortable, and increase the resale value of your house.  Many insulation projects can be do-it-yourself projects, reducing the cost.  If you have a older house, an insulation project can be a good investment.

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Cheap Workout Equipment

Cheap Workout Equipment

I Got This Weider Crossbow Weight Training System for $50!
Image Source: Dr. Penny Pincher

It is amazing how much cheap- or even free- workout equipment you can find if you are willing to look around.  From my perspective, workout equipment doesn't need to be fancy or expensive.  The point is to find a piece of workout equipment that you can use safely and that gets the job done of keeping you in shape.

Workout equipment is one of those things that lots of people buy, but few people use.  Once someone decides they don't want their workout equipment, it has little value to the seller and they want to get rid of it so they can have room for something else.  This means that you can often find really cheap prices for workout equipment that is in almost new condition and has been used very little.

If you have money to spend, you can get the exact make and model of equipment you want.  However, if you want cheap workout equipment, you'll need to be flexible about the exact features you can get for a low price.  Sometimes, you'll see a type of workout equipment you weren't even considering and decide to give it a try.  If you find something that you might use and it's cheap enough, it may be worth taking a chance.

Timing is important when buying cheap exercise equipment.  If the workout equipment you are considering is for sale on eBay, craigslist, or a yard sale, you will likely need to make a quick decision about whether to purchase it or not.  If you don't buy it, someone else might.  This is one of those cases where impulse buying may be necessary to get the best deal on workout equipment.

Where to Find Cheap Workout Equipment

Garage Sales
I have had good luck finding cheap workout equipment at garage sales.  My best find was a Weider Crossbow system that I brought home for around $50.  This is weight lifting system similar to a Bowflex.  The Crossbow has flexible rods that provide resistance, and you can adjust how many rods you are pushing against.  This is safer than free weights, and can be used for beginning to intermediate workouts, which suits me well.  Here are tips on how to find great deals at garage sales.  You will want to arrive early at sales that have workout equipment, bring cash, and don't be afraid to bargain to get a good price.

Craigslist
You can find cheap workout equipment and sometimes even free exercise equipment on craigslist.  Buying workout equipment on craigslist is a little more difficult than shopping at garage sales- you need to arrange a time with the seller to look at the equipment.  An advantage to shopping for cheap exercise equipment on craigslist is that you can find out the make and model of the item for sale and do some research to see if it is right for you.

Used Exercise Equipment Stores
If you check on the internet, you will likely find that there is a store that sells used exercise equipment in your area.  Many of these stores are consignment stores.  The owner of the workout equipment provides it to the store to sell, and when it sells the store gets a percentage of the selling price and the owner of the equipment gets the rest.  The quality of items for sale in a used exercise equipment store is generally pretty good.  Stores do not accept items for sale that are broken or in poor condition.  However, it is less likely that you will find really cheap prices in a store.  The store has to sell the items for enough to generate enough money to meet expenses.  Another downside of shopping for exercise equipment in a store- the salesperson may try to move you up to more expensive models with features that you don't really need.

Thrift Shops
Most thrift shops or consignment stores have some exercise equipment for sale.  My experience has been that they don't have a lot of variety, but when they have something the price is usually very low.  Sometimes Goodwill Thrift Shops have some small exercise equipment items.

eBay
You can find cheap exercise equipment for sale on eBay, however shipping large items is usually expensive.  Sometimes you can find local items for sale on eBay that have pick-up as an option so you don't have to pay for shipping.  The way I use eBay for shopping for exercise equipment is to check prices and see what types of items are available.  If an item has cheap or free shipping, I would consider it.  Otherwise I try to find a similar item locally to avoid shipping costs.

amazon
I have purchased workout equipment from amazon.com.  Sometimes you can find new equipment at low prices.  When purchasing from amazon, be sure to consider the shipping cost as well as the purchase price.  Sometimes you can get free or cheap shipping offers.  You can often find items for sale at amazon that you cannot find in sporting goods stores.

The Best Cheap Workout Equipment

Here are my favorite cheap workout equipment items:
1) Weider Crossbow


 If you can find a Crossbow or Bowflex cheap, you can get a lot of use from it.  It is quick and easy to adjust the resistance and it never really wears out.  It does take quite a bit of space, so make sure you have room for one before you buy.

2) Cheap Treadmill

A Used Treadmill is a Good Way to Get a Cheap Workout
Image Source: Public Domain Image

Lots of people buy treadmills- and then use them as a clothes rack!  You can often find used treadmills much cheaper than the price of new treadmills.  It is nice to have a treadmill, especially during winter months where walking on slippery surfaces can be dangerous.



3) Cheap Exercise Bike

A cheap exercise bike is great to have to stay in shape over winter.  You can find nice recumbent models that allow you to get a cardiovascular workout with minimal impact on your back.  It is nice to stay in shape and start off the biking season in spring in good shape.




4) Pull-up Bar
Pull-up bars are cheap- you don't need to worry about looking for a used one.  You can buy a nice pull-up bar for around $30.  You can get in shape quick by doing a few pull-ups a day.



5) Pedometer

A Pedometer is Cheap and Helps Motivate You During Your Workout Program
Image Source: Dr. Penny Pincher

A good pedometer can be a great motivator for walking to stay fit.  You can get a pedometer for around $20 that will last for years.  A pedometer allow you to track walking distance and can also calculate calories burned.  Here is a review of the key features to find in a pedometer.

6) Heavy Punching Bag

A Heavy Punching Bag Can Provide a Cheap Workout at Home
Image Source: Dr. Penny Pincher

I bought my Everlast Heavy Punching Bag new for under $100 including accessories, but you should be able to find used heavy punching bags for sale even cheaper.  A heavy bag takes some work to install if you plan to attach a punching bag to your ceiling.  You can also get heavy bag stand stands so the punching bag does not attach to your walls or ceiling at all.  Used heavy punching bags should sell in the under $100 range and provide a quick- and fun- workout.

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Cheap Winter Clothes: Find the Best Winter Clothes Sale

Cheap Winter Clothes!

Find the Big Clearance Sales and Get Cheap Winter Clothes!
Image Source: Dr. Penny Pincher

Winter clothes are the most expensive clothing you can buy, compared with clothing for the other seasons.  Winter coats are expensive, sweaters are expensive, and fleeces are expensive.  In the fall, the winter clothes appear in stores for full price.  The prices remain high all winter, through February.  Some winters, a cold snap comes along and motivates people to buy warm clothes at full price.  Then, in the early spring, something amazing happens...

Winter Clothes Sale- Spring Clearance

Last winter, I got curious about what happens to all those expensive winter clothes and coats.  The stores seem to have a good inventory of winter clothes all season.  Then in the spring, the stores have spring clothes for sale.  Do they ship the winter clothes to a warehouse for storage? Do the ship the winter clothes to the southern hemisphere, where it is fall when it is spring in the northern hemisphere?

Cheap Winter Clothes!
Image Source: Dr. Penny Pincher

During the winter, my kids had some activities, and while I was waiting for them  I got to spend some time in the mall walking around.  I got in the habit of walking through stores and monitoring the prices and keeping an eye on some of my favorite items that I would like to buy if they weren't so darn expensive.  The weather was warming up.  The days were getting longer.  It was still cold, but spring was coming.  February turned to March- but winter clothes were still in stores, and they were still full price!

Then it happened.  I stopped by the Sears store in the mall over lunch break on Thursday, March 7, 2013.  The Spring Clearance sale had begun, apparently that morning.

Save at Winter Clothes Sales
Image Source: Dr. Penny Pincher

The Cheap Winter Clothes Bargains Go Fast!

This was the big one!  All of the winter clothes were suddenly on sale cheap.  Not just the odd sizes and weird styles, but the good stuff too.  There were racks of long sleeved Docker's dress shirts and high quality fleeces.  This was just what I was waiting for!  And the discounts were huge- there were racks of $50 long sleeved shirts for $5 each.  There were racks of winter fleeces and sweaters, most priced at $5.  There were also racks of winter coats on clearance.  Even though friends, family, and even complete strangers describe me as a penny pincher, cheapskate, tightwad, and other things- I decided to get in on this action!

I picked out 5 of the nice shirts and a couple of the fleeces.  This was a major shopping spree for me, even though I only spent about $40.  I used a couple of other tricks to save even more than the 80% off clearance prices.

Find the Winter Clothes Sale Early and Beat the Crowd
Image Source: Dr. Penny Pincher

How to Find the Cheap Winter Clothes Sale

Just after the sale started at noon on Thursday, there were no crowds and tons of selection.  I must have happened upon the clearance racks shortly after everything was marked down.  I came back the next day at noon to get a few cheap winter shirts and fleeces for my sons and most of the good stuff was gone already.  Timing is everything.  Here is how to find the big winter clearance sale to get cheap winter clothes:

• Start patrolling in late February or early March- you don't want to miss the big mark-down.  All of the best winter clothes bargain can be gone in a matter of hours.
• If you can, walk through your favorite stores around lunchtime every day.  Lunch break works well.  
• If you go to the Mall, you can walk through several stores in only a few minutes, instead of focusing on a single store
• The big sale will likely hit a couple weeks before Spring Break so stores can make room for the new spring merchandise
• Be ready to pick up bargains when the big clearance sale starts- know what items, sizes, and colors you need for everyone in your family
• Carry your coupons
• Be ready to consider signing up for a store credit card to save even more- sometimes you can get an additional percentage off of your purchase
• Be especially alert the first week of March in most areas

Not all stores have a big mark-down all at once.  Some stores walk the prices down gradually over a few weeks.  This does not work well for me- the prices are too high at first, so I won't buy anything.  By the time the prices get low enough to consider, all the good stuff is gone, and warm weather has arrived.  If your favorite store does the gradual mark-down strategy, look at other stores to try to find a big, sudden mark-down sale on winter clothes.

It is Worth Some Effort to Find the Cheap Winter Clothes Sale

Walking around the mall is good exercise and generally enjoyable.  As long as you can avoid buying anything at full price, hunting for the big winter clearance sale is a good sport for penny pinchers.  Even though I have a good supply of winter clothes after finding the big sale last year, I may try to find another big sale this year- just for fun...

Update: Kohl's Winter Clearance February 2

Kohl's must be expecting an early spring this year.  Today, I happened upon some great winter items marked down 80% already.  There was a great selection of winter sweaters and fleeces for $10, marked down from $40-$50 or more!

Kohl's Started Their Big Winter Clearance on February 2
Image Source: Dr. Penny Pincher

Recommeded Reading:
How to Survive Store Crowds at Clearance Sales

Kohl's Credit Card and Kohl's Cash

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Debt Consolidation Calculator

Debt Consolidation Calculator

A good way to save money on interest and potentially reduce your monthly debt payments is to consolidate your debt.  Debt consolidation means combining several credit cards or other loans into a single loan with a lower interest rate.  If you have a good credit rating and enough income to make payments on a consolidation loan for your debts, you can get a much lower interest rate than typical credit card interest rates.  This allows you to pay the debt down faster since the interest rate is lower, and you may be able to reduce your overall monthly payments as well.

How does debt consolidation work and how much can you save?  Find out by using the Debt Consolidation Calculator to analyze your debts.

Debt Consolidation Calculator How Much Can You Save with Debt Consolidation?
Current Debts and Loans		Current Payoff Plan
Enter Debt Balance ($): Enter Interest Rate (%): Enter Monthly Payment ($):		Payoff Time (months): Total of Payments ($): Total Interest ($):
Enter Debt Balance ($): Enter Interest Rate (%): Enter Monthly Payment ($):		Payoff Time (months): Total of Payments ($): Total Interest ($):
Enter Debt Balance ($): Enter Interest Rate (%): Enter Monthly Payment ($):		Payoff Time (months): Total of Payments ($): Total Interest ($):
Enter Debt Balance ($): Enter Interest Rate (%): Enter Monthly Payment ($):		Payoff Time (months): Total of Payments ($): Total Interest ($):
Step 1: Debt Analysis
Current Debt Summary Total Balance ($): Total Monthly Payments ($): Total Cost to Payoff:
Debt Consolidation Plan
Enter Credit Card Balance ($): Enter Interest Rate (%): Enter Monthly Payment ($):		Payoff Time (months): Total of Payments ($): Total Interest ($):
Total Savings with Debt Consolidation:
Step 2: Update Debt Consolidation: Change Interest Rate or Monthly Payment and Recalculate...
Copyright (c) 2014 Dr. Penny Pincher. All Rights Reserved http://pennypincherjournal.blogspot.com

Using the Debt Consolidation Calculator

Enter information about your debt payments and loans in the Current Debts and Loans section of the calculator.  Enter the debt balance, interest rate, and monthly payment that you are currently making.  You can enter up to 4 debts in the calculator.  If you have less than 4 debts to enter, just enter 0 as the balance for the extra debt entries in the calculator.

Next, click "Compute" in the Step 1: Debt Analysis section.  This will calculate the payoff time, total of your payments, and total interest for each debt account.  The sum of all of your debt balances will be entered under Current Debt Summary, along with the total of your monthly debt payments and the total that you will pay under your current plan.

An example debt consolidation loan will also be entered under the Debt Consolidation Plan section of the calculator.  The default amount of the debt consolidation loan is the total of the debts entered under Current Debts and Loans.  The interest rate is 6%, and the monthly payment on the consolidation loan is the same as the total current payments on your debts.

You will be able to see how long it will take to pay off a consolidation loan and how much money on interest payments you will save.  The blue box shows your total savings with a debt consolidation loan.

Recommended Reading:
How to Become a Millionaire- The Millionaire Calculator

Credit Card Consolidation Loan Calculator

Penny Pincher Journal

Copyright © 2014 by Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

Credit Card Consolidation Loan Calculator

Credit Card Consolidation Loan Calculator

A credit card consolidation loan allows you to pay off your high interest credit cards with a low interest bank loan.  If you have good credit and high enough income, you can get a credit card consolidation loan from a bank and save a lot of money on interest.  How much money can you save with a credit card consolidation loan?  Find out with the Credit Card Consolidation Calculator!

Credit Card Consolidation Calculator by Dr. Penny Pincher How Much Can You Save with Credit Card Consolidation?
Current Credit Cards		Current Payoff Plan
Enter Credit Card Balance ($): Enter Interest Rate (%): Enter Monthly Payment ($):		Payoff Time (months): Total of Payments ($): Total Interest ($):
Enter Credit Card Balance ($): Enter Interest Rate (%): Enter Monthly Payment ($):		Payoff Time (months): Total of Payments ($): Total Interest ($):
Enter Credit Card Balance ($): Enter Interest Rate (%): Enter Monthly Payment ($):		Payoff Time (months): Total of Payments ($): Total Interest ($):
Enter Credit Card Balance ($): Enter Interest Rate (%): Enter Monthly Payment ($):		Payoff Time (months): Total of Payments ($): Total Interest ($):
Step 1: Credit Card Analysis
Current Credit Cards Summary Total Balance ($): Total Monthly Payments ($): Total Cost to Payoff:
Credit Card Consolidation Plan
Enter Credit Card Balance ($): Enter Interest Rate (%): Enter Monthly Payment ($):		Payoff Time (months): Total of Payments ($): Total Interest ($):
Total Savings with Credit Card Consolidation:
Step 2: Update Credit Card Consolidation: Change Interest Rate or Monthly Payment and Recalculate...
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How to Use the Credit Card Consolidation Loan Calculator

Update the Current Credit Cards section with the information from your current credit cards.  Enter the credit card balance, interest rate, and monthly payment that you are making.  The Credit Card Consolidation Calculator can process up to 4 credit cards.  If you have less than 4 credit cards, simply enter a zero balance for the extra credit cards in the calculator.

Next, click "Compute" in the Step 1 green box.  This will calculate the payoff time, total of payments, and total interest cost to pay off each of your credit cards.  Your total credit card balance, total monthly payment, and total cost to pay off your current credit cards is calculated and shown in the Current Credit Card Summary section of the calculator.

Example values will be automatically entered under the Credit Card Consolidation section.  The total credit card balance will be filled in, an interest rate of 6% will be entered, and your total monthly payment on your current credit cards will be used as your payment on your credit card consolidation loan.

The payoff time, total of payments, and total interest paid for the example consolidation loan is calculated.  The blue section shows the total savings achieved with a credit card consolidation loan.

You can change the interest rate or monthly payments for the consolidation loan and click "Compute" in Step 2 to update the results.  You may want to try making a higher monthly payment to pay off your loan faster and save even more money on interest.

Recommended Reading:
Savings Calculator

How to Become a Millionaire- The Millionaire Calculator

Penny Pincher Journal

Copyright © 2015 by Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy