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Compare Debt Relief Options With an Online Comparison

This guest post was written by Eliza Collins, who is a personal finance writer specializing in saving strategies, alternative income and debt relief options. You can read more of her articles at the debt settlement blog.

One the hardest parts about deciding which debt relief option to pursue is knowing which one will help the most. Sure, all debt relief options promise to help you get out of debt, but you need to know how fast and what payment is required. Take the guesswork out of your choice by using an online credit card calculator like the one from CNN Money. The calculator is designed for calculating credit card debt repayment, but you can easily use it for debt relief options. All you need is basic information about your debt: balance, interest rate, and minimum payment.

Credit counseling is one of the most recommended debt relief options. It’s benefits are a negotiated lower interest rate and minimum payment. To use CNN Money’s calculator for credit counseling, reduce your interest rates 1% each account and reduce the minimum payment by about 20% (multiply each of your minimum payments by .8). Choose the “debt-free deadline” option and type in four. That’s about the amount of time credit counselor’s aim to have your debt repaid. The result shows you the minimum payment necessary to pay off your debt in four years under those terms. Actual results may vary from by credit counselor and may include the agency’s fees.

To calculate a debt consolidation, only enter one debt with a balance equal to the sum of your other balances. For example, if you have a $5K, $7K, and $9K balance, you’d enter $21K for the balance. Then, enter the interest rate you hope to get. Ideally, it’s lower than your current average rate. The minimum payment can be anything, but enter something low, like $1. Then choose the debt-free deadline option and enter the loan-term you’d like, e.g. 5 years. The result shows the amount you’d have to pay on a debt consolidation loan with those terms. You can adjust the details to compare loans, e.g. a higher or lower interest rate or longer term.

The goal of debt settlement is to reduce your repayment amount by 40% to 60%. Results can vary widely, so it’s better to use a safe estimate, like 60%. Some settlements may be lower and that will equal more savings for you. Enter just one debt in the calculator, like you did with debt consolidation, except the debt should be just 60% of what you owe (multiply by .6). Use a 0% interest rate and any minimum payment. Then choose a debt-free deadline and enter the maximum amount of time you want to wait to complete all settlements, e.g. 3 years. The result shows you what monthly payment needed to settle your debt at 60%. Keep in mind that some debts will be settled sooner than three years, since settlements are offered as you save up the money.

If you want to see what it takes to pay off debt on your own, enter all the correct, unedited numbers for your accounts. Choose the minimum payment option to see how long it takes to pay your debt with a minimum payment. Or, use the fixed-payment option with the amount you can afford to pay each month, to see how you can get out of debt quicker by increasing your monthly payment. Finally, if you’d like to be out of debt within a certain amount of time, use the debt-free deadline option to get the monthly payment you’d need to make it happen.

CNN Money’s calculator is a great way to compare your debt options. All you have to do is play around with the numbers a little to get the results of various debt relief options.

About Andrea Whitmer

Andrea is a freelance web developer and mom trying to maintain a sense of humor in an otherwise chaotic world. She blogs in hopes of helping others avoid the same mistakes she made in the past. Join in the discussion here on So Over This, or connect on Twitter, Pinterest, Instagram, or Google Plus. You can also subscribe to new posts via RSS so you never miss out!


  1. advin jhonsire says:

    Choose the "debt without delay" and enter four. This is the time credit counselor to post their debt paid. The result shows the minimum payment required to repay its debt in four years under these conditions.

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