Using a Payoff Calculator: Financial Magic or Financial Literacy?

A New National Priority

The recession of 2008-09 and our national demographics have put a new priority on the subject of individual financial literacy and understanding concepts behind a tool like the payoff calculator. For generations, many people in America simply lived one paycheck to the next. The standard of living increased but it wasn’t until the post-WWII era that the common man started to accumulate any real personal wealth.

With this wealth came increasing household debt. For most consumers, however, there was no real need for a loan payoff calculator because most debt was on a home and other consumer debt was negligible. The introduction of credit cards in the 60s changed attitudes and levels of debt. Between that time and now, the American consumer has amassed trillions of debt to match and exceed rising household incomes. While many today could use an early loan payoff calculator, few know enough about finances to understand why or how to use one.

Because of this, the U.S. government has made financial literacy a national priority. There is a crisis today where both young and old are at the mercy of simple financial principles that they do not understand. The concern is that while older Americans had a chance to accumulate, the younger generation is stagnating.

Using Literacy to Achieve Magical Results

Americans were given the ability over the last 75 plus years to incur debt without understanding the relationship between time, principal and interest. While a simple payoff calculator can produce some insight, it takes an early loan payoff calculator such as we provide at Half A Payment™ to show the real “magic” of certain financial concepts.

Consumers are accustomed to making payments on loans for their homes, cars and other purchases such as credit cards. However, they seldom have any sense of the relationship between that payment and how they actually get out of debt. Without understanding and using a loan payoff calculator, it is easy to think making payments is the extent of your financial options.

In reality, the more quickly you reduce the principal you owe, the less interest you pay and the faster a debt is paid off. If you avoid using a lender’s money for even a little of the time each month, they have to charge you less interest. An easy-to-use early loan payoff calculator such as we provide at Half A Payment™ can solve part of the literacy issue by showing you how to save as much as years of payments and thousands in interest on any debt you have