Accelerated Debt Payoff - Definitions
| Term | Definition |
| Credit cards | Enter a total credit card debt and an average interest rate, or press the details button to enter up to 10 credit card accounts, one on each line. |
| Auto loans | Click on the details button to enter any auto 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 installment loans. |
| Other loans | Click on the details button to enter any additional installment 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 six installment loans. |
| Balances | Your total current balances for your credit cards, auto loans and other loans. |
| Interest rates | On your current debt, this is an average annual interest rate or APR that you pay. This interest rate is calculated for each of the categories of debt you have, including credit cards, auto loans, and other installment loans. For credit cards, the rate you enter is used to calculate the interest on all future payments for the credit cards. The length of time to payoff 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. The inerest rate for your consolidation loan is the estimated rate subject to availability and approval by the lender. |
| APR | (Not shown) The APR (annual percentage rate) is the yearly rate of interest and other fees paid to acquire the loan. The APR calculations incorporate fees and interest into a single rate. Lenders are required by law to disclose the APR, and the rate is used to compare various loans available. |
| Payment | This is your initial monthly payment. For credit cards, if you checked the "use credit card minimum payments" box, 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, this is one of the most common methods used by credit card companies to calculate minimum payments.) |
| Accelerated amount | This is an additional amount you wish to pay each month, to more quickly payoff your debt. This amount is added to your normal consolidated loan payment. |