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The personal finance site updates its "Get out of debt" goal for credit card and loan debt
The economy may be picking up, but the cobwebs of debt still linger for most people. Books and motivational programs for getting out of debt are flourishing, and the trend is catching on with entrepreneurs and investors alike. ReadyForZero, a startup that builds wholly personalized plans for eliminating credit card debt, launched earlier this month. But when people think of online financial service providers, Mint.com is the foremost site that comse to mind. The company launched a new upgrade for its "Get out of debt" Goal feature, which allows users to create concrete payment plans for eliminating credit card and loan debt.
"Get out of debt" has been the company's most popular goal since the Goals feature launched in June 2010. To address users' individual needs, the service now allows customers to create comprehensive strategies for eliminating their debt, including a sliding scale that shows how long it will take to pay off a specific account depending on which minimum payment the user selects, as well as how much interest you'll end up paying. For example, if you have $75K worth of loan debt with an APR or 7%, the service allows you to explore different payment scenarios, such as a $500 monthly payment plan, which will result in a payoff date some 33 years in the future and more than $127K going toward interest. But double that to a $1000 monthly payment plan, and you could be debt-free in just under nine years with only $25K going to interest.
The new feature allows users to address different types of debt to create more efficient payment plans, such as one payment plan that factors in the high APR credit card debt, versus a payment plan that accounts for the low APR of student loan debt. Users can create a 6-month payment plan that details specific steps to take to eliminate debt according to each individual account, and they can create an action plan to get out of debt while also putting money towards their savings.
“There are three principles of personal finance: spending less than you earn, making money work for you, and protecting your downside. But getting started on any of them seems impossible when you’re loaded down with debt,” said Mint.com founder Aaron Patzer in a prepared statement. Patzer is also the GM and VP of Intuit's personal finance group. “Different types of debt require different payment plans, charge different interest rates and affect credit scores differently – and it’s a lot to manage on your own,” he added.
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