How to Calculate Debt Management

Debt often looks worse than it is in reality. This is particularly true if you look at it as just one single amount that you owe. As soon as you start to break that number down into smaller payments, debt begins to be more manageable. There are a few different ways to calculate debt management online.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Spreadsheet program

Calculate Debt Management

1. Gather up specific numbers for your debt. To calculate debt management online, you need to know the amount of your debt, the interest rate, the minimum payment and the length of the loan. Although you need this information for each of your debts, it is best to keep it separate rather than lumping the total debt together.
2. Use different calculators to find out how you'd manage your debt by just paying the minimum each month. Set up a table in a spreadsheet program to keep track of your calculations. Be sure to add a box for the sum of your total payments each month.
3. Vary the different payment options on the debt calculators. For example, you could see how much you have to pay each month to be rid of credit-card debt in 3 years. Add these calculations to your spreadsheet, and see whether you can still afford your total monthly payments.
4. Find the appropriate debt calculator online. There are many free debt calculators, but you probably won't be able to find one that can handle all of your debt at once. For example, you can calculate credit-card debt management at CNN's website (see Resources below).
5. Prioritize your debts to pay off the lowest amounts first while still making monthly payments on your other debts. You may want to add your monthly living expenses (rent, electric and groceries) to your costs in the spreadsheet.

Tips & Warnings

• If you find that you can't manage your debt after calculating the minimum payments, you should meet with a financial professional. You'll have to see about consolidating some of your debt or negotiating with creditors for lower payments.
• You can also find lots of trial versions of debt management software online.
• It might be helpful for you to look for an online budget calculator to help you keep your living costs down.
• Do not use an online calculator that requires your bank-account numbers.