debt repayment - info.huecu.org€¦ · debt management plan (dmp) • reduce interest rates on...
TRANSCRIPT
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DEBT
REPAYMENT
Sarah Scruggs, Community Engagement Specialist
Migdalia Gomez, Community Engagement Manager
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75%
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TODAY’S
WEBINAR Reducing background noise
Using the “Questions” feature
Format
Presentation and Resources
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HUECU.ORG/BWH
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HUECU.ORG/COVID-19-HELP
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WHAT DOES TODAY
LOOK LIKE?
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EMERGENCY
FUNDCalculate Expenses (Needs)
1 month
3 months
6 months
Start small and build
$500
$1,000
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LIST YOUR DEBTS
And monthly payments!
Visit www.HUECU.org/HUB for this and other handouts.
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Amount APR TermsMonthly
Payment
$10,000 7.5% 120 months $119
$5,000 18.0% 60 months $127
CALCULATE THE
COST OF YOUR DEBTTotal Interest
Paid
$4,244
$2,618
Total
Amount
Monthly
Payment
Total
Interest
$15,000 $246 $6,862
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ROAD(S) TO
REPAYMENT
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• Personal Loans
• Refinancing Loans
• Mortgage Refinancing
• Auto Refinancing
• Student Loan Refinancing
• Debt Consolidation Loans
• Credit Card Balance Transfers
LOOK FOR
LOWER
RATES
Extending the terms
• may lower payment, butincrease total loan payments.
Benefits and conditions
• of the original debt, may not
apply once you refinance.
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ANNUALCREDITREPORT.COMReceive a free weekly copy of report from each of 3 bureaus until
April 2021.
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REPAYMENT STRATEGIES
SNOWBALL
Focus on smallest debt first.
Build momentum
AVALANCHE
Focus on highest interest first.
Start high then level off
SPRINKLE
Spread extra payments as
you’d like.
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WHAT
MOTIVATES
YOU?
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OUTSMART YOUR DEBT
INTEREST
RATE
MONTHLY
PAYMENT
INTEREST OVER
LIFE OF THE LOAN
TOTAL COST OF
LOAN
Current
Loan18% $254 $5,236 $15,236
Refinancing
(same term)10% $212 $2,748 $12,748
Pay more
minimum10% $254 $2,170 $12,170
$10,000 loan at 18% for 5 years
Round Up 10% $275 $1,963 $11,963
Paid off in 3.7 years and
save $3,273 in interest.
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HUECU.ORG/CALCULATORS
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WHAT IF DEBT IS GREATER
THAN INCOME?
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DEBT MANAGEMENT PLAN (DMP)
• Reduce interest rates on
debts
• Provide financial
counseling
• Cost based off state
($75 max monthly in MA)
• Debt Management Plans
are not the same as Debt
Settlement.
CREDITOR PAYMENT
BEFORE DMP
PAYMENT ON
DMP
Creditor A $132 $76
Creditor B $235 $185
Creditor C $80 $76
Creditor D $62 $22
Creditor E $518 $413
Creditor F $81 $68
$1,108 $840
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DMP: PROS and CONS
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75%
76%
GREENPATH
FINANCIAL
WELLNESS
Empowering people to lead financially healthy lives.
• Free for HUECU community
• Budget counseling
• Credit report review
• COVID-19 Counseling
• Immediate counseling
• Confidential
• Flexible Hours Monday –Thursday 8 a.m. - 10 p.m.
Friday 8 a.m. - 7 p.m.
Saturday 9 a.m. - 6 p.m.
HUECU.org/GreenPath
877-337-3399
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76%
1. Know Your Starting Point
2. Save for Tomorrow
3. Understand What You
Owe
4. Know Your Personality.
5. Reduce, don’t add, Debt.
NEXT STEPS
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BLOG.HUECU.ORG
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@myhuecu