UNDERSTAND AND
REDUCE YOUR DEBT

MAYBE IT STARTED WITH A CAR REPAIR. MAYBE IT STARTED WITH STUDENT LOANS. DEBT CAN SPIRAL QUICKLY. BUT NO MATTER WHERE YOU STAND, IT'S POSSIBLE TO PAY SMARTLY AND TAKE CONTROL OF YOUR FINANCES.

ARE YOU READY TO DIAGNOSE YOUR DEBT?

FIRST, MAKE A CLEAR PICTURE OF WHAT YOUR DEBT LOOKS LIKE.

PLEASE ROUND TO THE NEAREST DOLLAR.

CREDIT CARDS

EDUCATION LOANS

CAR LOANS

MEDICAL BILLS

HOME MORTGAGE

OTHER

AMOUNT (BALANCE)

CREDIT CARDS

EDUCATION LOANS

CAR LOANS

MEDICAL BILLS

HOME MORTGAGE

OTHER

MONTHLY PAYMENTS
(MINIMUM OR AVERAGE)

CREDIT CARDS

EDUCATION LOANS

CAR LOANS

MEDICAL BILLS

HOME MORTGAGE

OTHER

INTEREST RATE*

CREDIT CARDS

EDUCATION LOANS

CAR LOANS

MEDICAL BILLS

HOME MORTGAGE

OTHER

*Interest rates are often noted on your monthly statements. If you’re not certain or can’t find your interest rate, call up your lender or use these estimations:

Credit Card(s)*: 13%

Source: Federal Reserve, https://www.federalreserve.gov/releases/g19/current/

*Credit unions traditionally have lower rates than the national average. Your actual APR will be determined when you apply and will be based on your credit worthiness.

Education Loans (Undergraduate): 4.45%

Source: US Department of Education, https://studentaid.ed.gov/sa/types/loans/interest-rates#rates

Car Loans (60-Month): 4.4%

Source: Federal Reserve, https://www.federalreserve.gov/releases/g19/current/

Medical Bills (Washington State*): 0-12%

*Interest rate laws are state dependent
Source: Washington State Legislature, http://app.leg.wa.gov/RCW/default.aspx?cite=19.52.020

Home Loans (30-Year FRM): 3.94%

Source: Primary Mortgage Market Survey as of 11/2/2017, Freddiemac.com

WHERE DOES YOUR DEBT COME FROM?

Credit Cards

Education Loans

Car Loans

Medical Bills

Home Mortgage

Other

SO, WHAT CAN YOU DO ABOUT IT?

YOU’RE IN DEBT, BUT YOU CAN REDUCE IT.

WHICH DEBT SHOULD YOU FOCUS ON PAYING OFF THE FASTEST?

YOUR LOWEST BALANCE:

[X DEBT ORIGIN]

With the lowest amount of debt, you’ll be able to eliminate this debt most quickly.

YOUR HIGHEST RATE:

[X DEBT ORIGIN]

With the highest interest rate, paying this off quickly will save you money in the long run.

KEEP IN MIND THAT PAYING MORE THAN THE MINIMUM PAYMENT ON EACH BILL HELPS YOU SPEND LESS MONEY AND REDUCE YOUR DEBT MORE QUICKLY.

CREDIT CARD DEBT: $4000

INTEREST RATE: 13%

Paying $50/month:

187 months, $9,350 total

$5,350 in total interest

Paying $100/month:

53 months, $5,271 total

$1,271 in total interest

134 fewer months; Over 76% less paid in interest; $4,079 saved

Reference: https://www.becu.org/articles/reducing-debt,
Totals are amortized and do not factor in annual fees or rate changes.

However, reducing debt isn’t always this simple—it might be best to balance payments on a few different bills. Talk with your BECU Financial Health Check Specialist about making a strategic debt-payment plan.