Assignment 3.5 - Debt Repayment Plan and Analysis Template (2)

docx

School

Indiana Wesleyan University, Marion *

*We aren’t endorsed by this school

Course

301

Subject

Finance

Date

Jan 9, 2024

Type

docx

Pages

Uploaded by LieutenantCloverMink31

Debt Repayment Plan and Analysis Lender Debt Type Current Balance Interest Rate Minimum Monthly Payment Extra Payment Amount x x x x x x Currently Debt-Free Reflection Questions: 1. Section 8.2 of chapter 8 discusses perspectives on using credit. As you look at your current volume and use a credit, what perspective do you say you align with and why? Looking at my current volume and use of credit, I have the perspective of using credit as a tool for convenience and responsible financial management. I know the benefits of credit in terms of building a credit history and enjoying certain rewards or benefits associated with credit cards. However, I approach credit with caution and only use it for necessary expenses or emergencies. I prioritize maintaining a low credit utilization ratio and pay off my credit card balances in full each month to avoid accruing interest and debt.

2. Section 8.3 of chapter 8 stresses the need to make decisions about borrowing money prior to borrowing it. What decisions did you make prior to obtaining your loans and how are those decisions affecting your ability to repay these loans? Prior to obtaining any loans, I made several important decisions. I carefully evaluated my financial situation and determined the purpose and necessity of borrowing money. I considered other possible options and the potential impact on my overall financial well-being. Also, I thoroughly researched and compared different loan options, including interest rates, repayment terms, and any associated fees. By making informed decisions before borrowing, I ensured that I only took on loans that aligned with my financial goals and that I could comfortably repay, which I succeeded in now living debt free. 3. If you use credit cards, review the information found in Section 8.5 of chapter 8 to discuss how you are managing your credit debt. If you do not use credit cards, review that same section and discuss why you don’t use them. As someone who does use credit cards, I manage my credit responsibly. I regularly monitor my credit card balances and transactions to stay aware of my spending habits. I pay my credit card bills in full and on time each month to avoid interest charges and late fees. Also, I utilize the resources provided by my credit card company to track my spending, set spending limits, and receive alerts for unusual activity. By practicing responsible credit card management, I maintain a healthy credit score and avoid debt. 4. Getting out of debt can be extremely challenging but it is also important. Using section 8.7 of chapter 8 , discuss how you plan to pay off each debt and along with when you plan to pay off each debts to become debt free. While I am currently debt-free, it's important to acknowledge the significance of having a plan to pay off debts if I were to have any. If I found myself with debts, I would approach the payment process strategically. Using the principles outlined in Section 8.7 of chapter 8, I would prioritize paying off debts with the highest interest rates first, as they tend to accumulate more interest over time. I would also ensure to make at least minimum payments on other debts to avoid penalties and maintain a positive credit history. I would create a budget to distribute extra funds towards debt repayment. By establishing a solid approach and setting specific goals, I’d strive to pay off each debt progressively until I become

debt-free. The timeline for debt repayment would vary depending on the amount of debt and available resources, but my focus would be on consistency and steady progress towards financial freedom.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version