“School loans, credit card bills, house payments, car payments, and other loans are causing many people to feel overwhelmed during these tough economic times,” according to Erin Ludwig, Iowa State University Extension Family Resource Management Program Specialist. “The PowerPay system can help consumers create a plan to manage their debt.”
The debt management principles behind the PowerPay program are proven. The three principles are: do not acquire any new debt, keep the total amount of money going toward debt elimination constant until all debts are repaid and, finally, when one debt is paid off, roll that payment over to one of the other debts. PowerPay online allows consumers to use the numbers from their own obligations to see how much more quickly they could become debt free and how much they can save in interest costs by following these principles. Consider these tips for using PowerPay.
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In order to use the program, consumers need to provide three pieces of information about each debt they want to eliminate: the current balance, the monthly payment amount and the annual interest rate. The Web site is secure, but consumers should recognize that they are not entering any identifying information. They can make up names for their creditors and no account numbers are required.
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After the debt information has been entered, PowerPay calculates the repayment time and interest costs and compares the totals with and without using rollover payments. Consumers find that they can be debt free months, and often years, sooner by following a debt elimination plan.
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The sequence in which the rollover amounts are assigned is up to the user. They can be made according to highest interest rate, lowest balance, shortest repayment time or a customized order can be created. Paying off cards with the highest interest rate first will save the most money in the long run, but users often find that quickly eliminating one or two creditors with small balances gives them a psychological boost, and the long-term savings are only slightly less. Consumers can use other PowerPay options to see the impact of extra payment amounts on a monthly, quarterly or one-time basis.
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Thousands of consumers from around the world have reported saving millions of dollars in interest costs after using PowerPay to create a debt elimination plan. Being able to see that a positive outcome is not so far away has given them the confidence to follow through with their plan.
The time and money saved using this system of repayment is often breathtaking. The PowerPay calculator available for free on their Web site at https://powerpay.org or you may contact Erin Ludwig at 563-380-1475 or eludwig@iastate.edu for more information on this program.
ISU Extension offers consumer information that builds the skills and knowledge necessary to make wise and informed household management decisions. For more information on dealing with tough economic times, visit your local extension office or check out ISU Extensions Managing in Tough Times website 24 hours a day 7 days a week. The Iowa Concern Hotline offers 24 hour confidential assistance for those dealing with stress, financial concerns, and legal questions. They can be reached by calling 1-800-447-1985. These resources can help you find reliable resources backed by research when you are forced to make hard choices during tough economic times.
CLH
11/12/2009