Debt: How a couple paid $ 40,000 off in six months

Amy and Emily Crockett with their two children.
Lent by Amy and Emily Crockett

Amy Crockett has refinanced her $ 40,000 credit card debt to better handle payments.

She calculated the amount of interest she paid each day. These were about two dollars.

She paid four to ten dollars a day in addition to monthly payments and paid off the debt in six months.

Early in their marriage, Amy and Emily Crockett quickly raised $ 40,000 in credit card debt. “None of us noticed what we were buying,” IT specialist Amy Crockett told Business Insider. “We financed our wedding. We paid for our custom-made wedding rings. And then we bought a watch that was probably too expensive for us, and all those things collapsed.”

The couple decided to refinance their credit card debt, reducing their interest rates by 10 percent. According to documents seen by Business Insider, the couple was offered a monthly repayment of $ 830. It would have paid off the debt within a year – but Amy Crockett was determined to make it faster.

She calculated how much interest she was charged per. day

First, she calculated how much interest she was charged each day; it was about two dollars. “One of the things I love about SoFi (Note d. Editor: love the company that refinanced the debt), is that they allow you to access this data at any time, “she said.” When I played with the app, I found that one can calculate how much interest accruing per. day.”

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She realized that small daily payments would quickly reduce the loan balance. “What’s fascinating about it,” she added, “is that if you do, the loan balance starts to shrink because you take $ 10 off the loan amount and the interest rate goes down. That way, the debt mountain is reduced pretty quickly.”

She made small payments every day

“I’ve found that if I pay two to four dollars a day over the interest rate – or even ten dollars a day if I can raise it – then the balance drops drastically,” says Amy Crockett.

According to Insider-verified records, Amy Crockett started paying $ 4 extra a day. She later increased her daily contribution to $ 10 a day. In just one billing cycle, Amy Crockett reduced her loan balance by $ 5,220.

She paid $ 40,000 off in just six months

Amy Crockett said paying $ 40,000 in debt in just six months inspired her and Emily Crockett to live debt-free. In addition to their credit card debt, Crocketts also refinanced $ 25,000 in student loans, saving $ 1,200 a month by refinancing their home and rental home mortgages.

The couple used their experience to buy more rental properties in Fort Worth, Texas with their improved credit score. Also, their relationship to spending changed drastically after focusing so much on debt reduction.

“I used to want all the cool cars that were on the road,” says Amy Crockett. “Today I drive a paid car. It’s a Hyundai from 2015 or 2016. I look at the Teslas driving by, and as a technically savvy person, I’m like: ‘Oh, I want that too. And then I think, man, if I had to spend that money, it would be the exact loan payment to buy a house, which would ultimately mean financial freedom. ”

This article is translated from English by Ben Peters. You can find the original here.

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