Debt can be overwhelming, often leaving you feeling helpless – without any idea of what to do next. Some people react by putting their heads into the sand and carrying on, which only leads to more financial troubles. Others flounder and make a few attempts to stop things from getting any worse, but without much success.  

Armed with the right tools and a few helpful tips to steer you in the right direction, it’s entirely possible to regain control and work toward financial freedom. One such tool is a debt calculator, which can be a powerful resource for any South African looking to understand their debt and create a realistic repayment plan. 

In this guide, we’ll walk you through how to use a debt calculator effectively, interpret the results, and take actionable steps toward reducing your debt burden. 

Take The First Step Using the Debt Calculator

As with most endeavours, the first step is quite simple. All you need to do is fill in your details. Typically, these calculators require basic information, including your total debt amount, interest rates, and monthly repayments. While it is indeed quite simple, we will admit that you may need to dedicate a few hours to gathering the right information so that you can be as accurate as possible.  

This way, you will be able to get a much clearer picture of your financial situation. 

Analyse The Results 

Once you’ve logged all the correct details into the calculator, you will be provided with insights into how long it will take to pay off your debt and the total interest you’ll pay over time. What this information highlights, is the importance of increasing your repayments in order to reduce both the length of time taken to make your repayments and the total cost of your debt. 

Create A Plan 

The key is to take the results provided by the calculator and develop a repayment strategy that will help you achieve your goal of becoming debt-free. There’s no one-size-fits-all solution, though, because everyone will have different circumstances that will dictate how they pay off their debts. By and large, it is often best to focus on paying off your high-interest debt first, which is known as the avalanche method. Alternatively, you could prioritise paying off your smaller debts so that you can build momentum, which is referred to as the snowball method. 

Seek Professional Advice 

It’s possible that you could still feel somewhat out of your depth after you have used the calculator, or the results could indicate a more significant debt problem than you previously anticipated, or you could be stuck wondering which repayment strategy is best for you. 

In any of these cases, you may need to consider consulting a financial advisor or debt counsellor. These professionals can provide personalised guidance to help you manage your finances effectively. 

Feeling informed?  

Tools like our Monthly Personal Budget Calculator and online debt calculators are a simple yet powerful way of understanding and managing your debt. By using it to develop a repayment plan, you can take the first steps toward financial freedom.