Overspending and my pocketbook go hand-in-hand. Unfortunately, my pocketbook hasn’t really been able to keep up with my expenditures, even though I often act like it does.
It’s easy to neglectfully whip out the plastic to cover frequent trips to the mall. It’s also easy to turn a blind eye to the auto loan, student loan, and credit card balances that still need to be paid off. All that hard-earned money being frivolously spent at my favorite shops could have been going towards paying down my debt.
Ignoring my debts could only go on for so long until I had to face the cold, hard fact that my debt was starting to get out of control. I knew I had to do something, but all those numbers and constant bills piling up on my kitchen table were starting to overwhelm me. I knew I needed to get a hold of my debt, and fast.
Why is it Important to Pay Off Debt ASAP?
There are so many reasons to pay off your debt quickly that it would be impossible to focus on just one. So let’s talk about them.
Lower the total amount of interest paid. Getting a loan doesn’t come for free, no matter what type of credit you apply for. Whether it’s an auto loan, credit card, or mortgage, it will be charged interest. The longer you hold onto that debt, the more interest you’ll be paying over the life of the loan. On the flip side, the faster you pay off your debt, the less interest you’ll need to pay. That can translate into a lot of money saved.
Cut back on the number of bills to pay. The more bills on my plate, the more overwhelmed I get, which is why I made a valiant effort to scale back on the number of payments I was obligated to pay. The more creditors you owe money to, the more bills you’ll be responsible for paying every month. Every time you eliminate one creditor from your record, you’ll have one less bill to pay every month.
Boost your credit score. Too much debt can be bad for your credit score. This is especially true if your credit utilization (the amount you owe relative to your credit limit) is far too high. Having a smaller amount of debt can have a positive impact on your credit score, which makes whittling down your debt that much more important.
Increase the odds of loan approval. This might sound counterintuitive, considering the fact that we’re talking about eliminating debts, not adding them. But there are times when loans are essential, especially when it comes to mortgages. If you want to become a homeowner one day, you’ll want to make sure your finances are in good standing, and that includes having minimum debt.
Lenders look at a lot of things before approving borrowers for mortgages, and that includes the amount of debt being carried. More specifically, they look at your debt load compared to your income, known as a debt-to-income ratio.
If your debt is already too high, your income might not be able to accommodate the addition of more debt. In this case, you’d be at risk of being turned down for a home loan. On the other hand, if you apply for a mortgage with minimum debt, your odds of getting approved are higher.
Strengthen financial security. Having too much debt can place you in a potentially risky situation if you are ever in need to access a large lump sum of money to cover an unexpected expense. You also won’t have much money freed up to be put towards setting up a secure financial future, such as saving up for a child’s post-secondary education or retirement. Eliminating all that debt can help you build a financial cushion to fall back on and make you more financially secure overall.
So, now that we know why it’s important to pay off our debts as soon as possible, what are some tools at our disposal that can help make this process easier and more streamlined?
Luckily, we live in a highly technological world that offers a myriad of digital products that can be used to simplify life in just about every aspect. And when it comes to paying down our debt, there are dozens of handy apps out there that can help us get a hold of our debt and move us along the path towards becoming debt-free.
Best Debt Payoff Apps 2018
I’ve researched a number of debt payoff apps and have found the following to be especially helpful. You might want to give one of them a try too!
It’s easy to get motivated to pay off your debts with this handy debt planning app. It’s free, and it has some nifty features that allow you to see how long it will take for you to repay all of your debt. It also tells you the amount of money you’d be saving in interest by using specific debt-paying techniques. This app can help you create a detailed, step-by-step plan for paying your debt off.
You can even track your debt payments to help you stay on top of where you’re at. I want to be able to see how any additional payments that I make towards my debt will impact my overall strategy. With the help of Debt Payoff Planner, the time-frame for getting out of debt will be updated with each new payment information inputted. This is a great app to help see how much progress is being made.
For $1.99, DebtTracker Pro is an amazing app to help you stay on top of your accounts. The user interface is so simple to use and gives you the full picture of where you stand with all of your debt. All accounts and balances are contained in one easy-to-read screen that helps you focus on getting rid of your debt. You can select the type of repayment method you prefer to use to pay down your debt, or even create a unique one of your own.
The app will automatically make a recommendation about payment amounts for every debt account you enter once you’ve inputted your financial data and selected a payment strategy. It will also display the total amount of interest paid based on the numbers. You’ll even get alerts notifying you when payments are due so you never fall behind.
The Debt Payoff Assistant app uses the Snowball Method to help users pay off their debt. This debt repayment method essentially involves paying off the smallest debts first, eventually working up to the largest. Minimum payments are made on your debts until the first debt is repaid. The extra payment from the debt that has been paid off will then be applied to the next debt load in line. As more debts are paid down, the extra payment amount will increase, hence the name “Snowball” Method.
That said, the app still allows you to pick whichever debt repayment strategy you want, or even multiple strategies. You can keep tabs on as many debts as you have and track extra payments.
One of the best things about the interface is that it will display your total debts, any debts remaining, interest paid, and interest saved. You can also take advantage of the notifications of when your payments are due as well as the payoff date calculator to determine how monthly payment amounts will impact when the debt will be completely paid off.
The focus of this app is to help you minimize the total amount of interest that you will have to pay on your debt accounts. It does this by using the accelerated payment method to create payment schedules, which involves paying off the debt with the higher interest rate first.
Once the first debt load is repaid in full, the monthly payment that was used to pay that debt is then applied to the next debt account until all debt is fully paid off. The app also offers the option to pay down the debt with the lowest balance first, though you’re free to choose whichever method you like.
One of the great features of the iQuick Debt Payoff app is the loan snapshot that is provided with the amortization schedule, which includes the outstanding balance, interest paid, and monthly payments, to name a few. You can then download the table or email it to yourself. You can compare as many as 10 debt accounts at once.
Technology has literally taken over just about every aspect of life, so why not use it to our advantage? I’m obsessed with these debt payoff apps and I’m convinced that they are instrumental in helping me get my debt down to where it’s at today. Which one of these is the best debt payoff app 2018? That’s a tough question, but I’m just as convinced that any one of these can help you get back on the path to finally living debt-free too.