How long to pay off $50,000 in credit card debt?
It will take 47 months to pay off $50,000 with payments of $1,500 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.
- Find a credit counseling agency with a good Debt Management Plan.
- Look into a Credit Card Debt Forgiveness Plan.
- Pick one of the many debt-reduction methods and “Do It Yourself”
- File for bankruptcy.
- Pay More Than the Minimum. ...
- Focus on High-Interest Debt First. ...
- Pay Off the Card With the Lowest Balance First. ...
- Review Your Expenses. ...
- Use Extra Cash to Pay Down Your Debt. ...
- Home Equity Loan. ...
- Personal Loan. ...
- Balance Transfer.
It's never easy to get out from under your credit card debt. But it's one thing to have $6,473 (the average American credit card debt) and another to have $50,000 or more. At that level of debt, you're likely paying hundreds each month -- if not a thousand dollars or more -- just to meet interest payments.
To pay off $40,000 in credit card debt within 36 months, you will need to pay $1,449 per month, assuming an APR of 18%. You would incur $12,154 in interest charges during that time, but you could avoid much of this extra cost and pay off your debt faster by using a 0% APR balance transfer credit card.
Paying off $50,000 in debt can take anywhere from three to seven years. How much you pay in interest over the life of the loan will depend on how long your loan term is.
Look Into a Debt Consolidation Loan
Debt consolidation loans are personal loans you can use to pay off credit card debt. On average, personal loans carry lower interest rates than credit cards, so you may be able to save some money this way.
- Create a budget and track your income and spending. ...
- Be mindful of debt fatigue. ...
- Prioritize paying high-interest debt first. ...
- Get a higher-paying new job. ...
- Freelance on the side. ...
- Negotiate with your credit card companies and other creditors.
- Using a balance transfer credit card. ...
- Consolidating debt with a personal loan. ...
- Borrowing money from family or friends. ...
- Paying off high-interest debt first. ...
- Paying off the smallest balance first. ...
- Bottom line.
- Tip #1: Don't wait. ...
- Tip #2: Pay close attention to your budget. ...
- Tip #3: Increase your income. ...
- Tip #4: Start an emergency fund – even if it's just pennies. ...
- Tip #5: Be patient.
What is considered high credit card debt?
The general rule of thumb is that you shouldn't spend more than 10 percent of your take-home income on credit card debt.
Credit card debt in America by the numbers
In short, that amounts to an average balance of $5,733 per cardholder. Eye-watering, to say the least–and the fact that many of us carry no balances makes this statistical average even more alarming.
However, multiple accounts may be difficult to track, resulting in missed payments that lower your credit score. You must decide what you can manage and what will make you appear most desirable. Having too many cards with a zero balance will not improve your credit score. In fact, it can actually hurt it.
Most credit card companies won't provide forgiveness for all of your credit card debt. But they will occasionally accept a smaller amount to settle the balance due and forgive the rest. Or the credit card company might write off your debt. But this step doesn't eliminate the debt—it's often sold to a collector.
Consider paying down your credit cards with the highest interest rates first or paying off your smallest debt first. Look for ways to reduce your expenses and put the money you save toward your debt. Student loan forgiveness programs and income-based repayment programs can help with student loans.
You can hire a debt settlement company who will negotiate with your creditor for a fee, or you can cut out the middleman and do it yourself. Debt settlement is commonly used when the borrower can no longer afford the high interest on credit card debt, coupled with the amount owed.
- Figure out your budget.
- Reduce your spending.
- Stop using your credit cards.
- Look for extra income and cash.
- Find a payoff method you'll stick with.
- Look into debt consolidation.
- Know when to call it quits.
Most negative items on your credit report, including unpaid debts, charge-offs, or late payments, will fall off your credit report seven years after the date of the first missed payment. However, it's important to remember that you'll still owe the creditor.
- Make a Budget and Stick to It. You must know where your money goes each month, full stop. ...
- Cut Unnecessary Spending. Remember that budget I mentioned? ...
- Sell Your Extra Stuff. ...
- Make More Money. ...
- Be Happy With What You Have. ...
- Final Thoughts.
| Debt Settlement | DMP Monthly Fee | |
|---|---|---|
| Freedom Debt Relief Also Great for Customer Satisfaction and Reputation | Yes | N/A |
| Money Management International Best for Small Debts | Yes | $0–$59 |
| Pacific Debt Relief Also Great for Low Fees | Yes | N/A |
| Apprisen Best Overall for Credit Counseling | No | $0–$45 |
What is the best loan to pay off credit cards?
- Upgrade: Best overall.
- SoFi: Best for good credit.
- Happy Money: Best for paying off credit card debt.
- LightStream: Best for low rates.
- Universal Credit: Best for bad credit.
- Best Egg: Best for secured loan option.
- Discover: Best for fast funding.
You'll have the best chance of getting approved with an excellent credit score, such as one above 800. You may struggle to find a lender that will approve a $50,000 loan for folks with poor or bad credit. A "poor" credit score is considered 580 or under. Most lenders require at least a "fair" score of around 670.
Debt fatigue occurs when a debtor becomes overwhelmed by the amount of debt incurred and the seeming futility of the debt repayment process. Debt fatigue may result in a debtor giving up on making loan payments and overspending again.
Options For Paying Off Substantial Credit Card Debt. There are a number of strategies to pay off large amounts of credit card debt. They include personal loans, 0% APR balance transfer cards, debt settlement, bankruptcy, credit counseling and debt management plans. You may be able to use more than one of these options.
- Take advantage of debt relief programs.
- Use a home equity loan to cut the cost of interest.
- Use a 401k loan.
- Take advantage of balance transfer credit cards with promotional interest rates.
