Dig Out of Debt.
Debt has a way of piling up faster than the snow in your driveway. (For our Florida members, use your imagination and try not to rub it in.)
Here are three strategies for digging your way out of debt.
1. The Snowball Method
With the snowball method, you make the minimum payments on all of your loans and use whatever money’s left over to pay off the smaller debts first. It’s like shoveling your sidewalk before you take on the driveway. It feels good to accomplish something right away, and allows you to focus on the bigger loans moving forward.
2. The Avalanche Method
With the Avalanche Method, you make the minimum payments on all of your loans and use whatever money is left over to pay off the loans with the highest interest faster — saving you hundreds in the long run (cue the celebratory hot chocolate).
3. The Snowblower Method
Okay, so we just made up the term “Snowblower Method,” but the point is, there’s an easier, more efficient way to get out of debt. With debt consolidation, you take out a new, low-interest loan — such as an LMCU home equity loan at 3.00% APR* — and use the money to pay off your loans all at once. What you’re left with is one loan payment at a lower interest rate, saving you hundreds or even thousands on interest.
To learn more about these financial tips visit LMCU.org/FinancialWellness or visit HomeEquity.LMCU.org to apply for a home equity loan today.
*APR = Annual Percentage Rate. Best rate available to well qualified borrowers with under 80% Combined Loan to Value (CLTV). Assumes auto-pay from LMCU checking account. Your rate may be higher based on your specific CLTV, term, and credit score. Rates as of 11/23/2020. Rates subject to change after account opening. HELOC rates are variable and based on the current index margin; rates will not exceed 12%. Payment example: A HELOC with a balance of $20,000 at 3.00% APR will have 120 interest-only monthly payments of $50.96. After the 120 interest-only payments, the full amortization monthly payment will be $138.12 for 180 payments. Home equity loans are available for properties located in Michigan and limited counties in Florida. Fees may differ in Florida. Terms, loan amount maximums, and other restrictions apply. Call or see branch for details. $5 membership required if not a member.
Topics: Wallet Wisdom