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Manage Debt Obligations

Guides on how best to manage and reduce your debt obligations.
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Managing Debt Obligations:

Managing Your Credit Cards

Credit card debt is the fasted growing debt among American households.

Understand these basic facts:

  • According to the American Bankruptcy Institute, nearly 85-90% of bankruptcy filings were due in part to excessive credit card debt.

  • Households receive on average 20 credit card offers per year.

  • Credit card companies make money when you become a "revolving" credit card holder — which means the holder maintains a balance from month-to-month.

  • Credit card companies make money when you pay only the minimum required amount — which minimum amount is interest plus a small percentage (around 0.5%) of the balance outstanding.

  • Credit card companies make money when you accept and then spend up to the credit limit offered.


With these facts in mind, the card company's business strategy is to get you to:

  • accept their card using pre-approval offers;
  • charge out the maximum credit limit awarded;
  • pay interest-only payments each month;
  • and maintain a credit balance from month-to-month.


Now consider this:

If you paid just the minimum payment on a $4,800 credit balance at the average annual rate of 17% plus 0.5% for principal reduction, it would take you over 21 years to pay off your balance (considering that you did not have any other charges).

That means paying $13,376.35 in interest charges alone, for a total repayment of $18,176.35 for the privilege of charging $4,800!

No wonder that credit cards are one of the lender's most profitable product lines.

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Managing Debt Obligations:

Reducing Student Loan Payments

You can reduce your total student loan payments by as much as 40% or more by consolidating

if you are a recent graduate with mulitiple student loans, you should take advantage of the federal student loan consolidation program

by consolidating your student loans, you can combine your loans into one low, repayment plan that fits your budget with no repayment penalities


The benefits of consolidating your student loan debt:

  • get single billing:
    if you have mulitiple student loans (meaning that you borrowed money each academic year), you will have different repayment terms and due dates. You may have multiple payments that you need to make each month.

    By consolidating your student loans, you end up with one, single payment each month.

  • reduce payments:
    you can consolidate your student loans under repayment terms that meet your budget. By extending your term to 20-30 years, you can drop your existing payment by half. That puts extra money in your pocket for those other important needs.

  • lock-in fixed rates:
    some of your current student loans may have variable rates that can go up or down each year. You can lock-in a low, fixed rate by consolidating your student loans.

  • get borrower benefits:
    consolidate through our program and receive borrower benefits that can reduce your payment even further

  • expect no penalities:
    you can prepay your consolidated student loan anytime you like. There are no prepayment penalities of any kind.

  • expect no credit check:
    no need to worry about your credit score. The federal consolidation program does not require a credit check. Almost all students qualify for the federal consolidation program.

  • for more information:
    link to our affiliated site to consolidate your student loans. Use our quick calculator to estimate how much you can reduce your monthly payment: click here for consolidating student loans


Zero Costs / Zero Obligation to Apply

  • no credit check required
  • no costs to apply
  • no costs to setup your account
  • no worry — your submission will be secured
  • no paper work — you can e-sign and process your application online

get more information

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Managing Debt Obligations:

Consolidating Personal Loans

We have a debt consolidation worksheet to illustrate how to reduce monthly expense: click

You may have a number of personal loans — such as auto, retail, furniture, recreation loans — that take a bite each month out your take home pay.

You may consider consolidating these balances under a debt consolidation plan that allows you to manage your monthly budget.

SayLending:   view debt consolidation plans

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Managing Debt Obligations:

Managing Your Mortgage Loan

1. FAST Payoff Plan:

What if you can payoff your mortgage quickly in about 1/3rd of the time without changing your current monthly payment or cash flow position.

By paying off your mortgage early, you can save a lot of money by not having to pay all that interest to the banks

click here for quick slide presentation on how you can payoff your mortgage FAST

includes a FREE, no obligation profile analysis of your current mortgage payoff position


2. Get a Shorter Term:

Another quick way to pay down your mortgage is to refinance your mortgage at a shorter term.

Both fixed rates and adjustable rate mortgages come with 15-Yr terms. You can payoff your mortgage in half the time and reduce your total interest paid by approximately 2/3rds.

For illustration:
view the savings below for a mortgage loan of $100,000:

  15-Year  30-Year
Interest Rate (APR):  7.50%   8.00%
 Monthly Payment:  $927.01 $733.76
Number of Payments:  180  360
Total Money Spent: $166, 862 $246,149
Total Interest Paid:  $66,862  $164,149


3. Pay a Little Extra Each Month:

If you like the option of paying off your mortgage faster but don't have the finances to pay the higher monthly payment under a 15-Yr term, consider pre-paying your mortgage a little each month.

Start with a mortgage loan that has a 30-year repayment term. You will be required to pay the minimum amount each month based on a 30-year amortization schedule.

You can pay a little extra each month by sending in an amount that is over the minimum amount required.

Link to this payoff calculator to run your own numbers:

or download our FREE mortgage amortization worksheet (Excel file)


Important Note on Prepayment:

  • Some mortgage lenders penalize on prepayment.

    If you mortgage lender has a prepayment penalty, negotiate to have that prepayment clause removed.

    Also be sure to notify your lender that any extra cash over the minimum payment is for reducing the mortgage principal, and is not to be used to pay for any non-accrued mortgage interest.

  • Some lenders maintain a window when prepayments can be made to reduce the principal.

    Typically, this window is about 15 days after your monthly payment due date.

    For example, if the monthly payment is due on the 15th of each month, the lender will accept your prepayment from the 16th to the 30th. Any payment received outside of this window will be used to pay accrued mortgage interest.

    This window of payment is only applicable with some lenders. So check with your mortgage lender before making extra payments.


4. Accelerated (Bimonthly) Payments:

Many lenders offer the accelerated payment schedule: which allows you to pay half of your monthly mortgage payment every two weeks.

Say your monthly mortgage payment equals $1000. Under the accelerated payment schedule, you will pay $500 every two weeks.

This equals to 26 bimonthly payments, or equivalent to 13 monthly payments instead of the standard 12. You can in effect payoff your 30-year loan in 272 months.

For example, if you had a mortgage loan balance of $100,000 at 7.50% / 30 -Yr:

  • If you participated under the bi-monthly accelerated program, you will pay $349.60 every two weeks.

  • You will payoff your mortgage in 23 years and 3 months, saving you about $40,000 in total interest.

Link to this accelerated mortgage calculator to run your own numbers:


We have more information about mortgage loan management:

and information related to bill payment, quick payoff strategies and more

SayLending:  managing your mortgage loan

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Managing Debt Obligations:

Maintaining Good Credit

Credit management means successfully managing your credit by paying your debt obligations on time

Applicants with good credit scores save on credit costs: have you checked your credit report lately?

Any time that you fail to make a payment on time may be reported to the credit agencies.


Your credit information is maintained for other parties to review

when you make an application for a loan, apply for insurance, and in some cases, seek employment.

Some lenders may not approve your application for credit if your report has any "1X60" or greater on your report. Other lenders may not give your the best interest rate if your report shows any "1x30".

Likewise, employers who see more than 3x30, or 2x60, etc., on your credit report may consider you at risk since your credit history shows that you fail to meet your credit obligations.


That is why maintaining a strong credit report is extremely important.

More information available:

SayLending:  maintaining good credit
SayLending:  check your credit report

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Managing Debt Obligations:

How Much Charity

On average, Americans give between 5-10% of their total income to charity

The challenge is twofold:

  1. giving enough charity that does not exceed your budget;
  2. making sure the charity is donated to a worthy cause.

    understand the questions you should ask


If your budget is tight, you may consider donating your time in lieu of a cash contributions.

Charities biggest budgets are staffing and administrative work. Your 1 hour of donated time may be worth in similar dollar amount if the charity had to purchase your service.

Some organizations to contact:

LDS foundation (100% of your donation is distributed)

united way
salvation army
red cross

your local church

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