So you have organized your debts, linked all your accounts, and set up a monthly payment plan. What are your next steps? As a service to our most active and motivated users, ReadyForZero is launching ReadyForZero Insights, a dashboard of data to help you further understand and take action on your debt.
Is your plan working out for you?
The plan performance view is a way of tracking your actual payments compared to your payoff plan. A green check mark means you’ve paid according to plan that month, while a grayed out circle means that you didn’t. Hover your mouse pointer over the month to see exact numbers. This can give you a quick way to see how you’ve been doing. Your goal here should be to stay green all the way throughout.
What does this tell you? When paying down your debt, we see that staying consistent month over month is more effective than paying a large chunk once and then going back to paying minimum (or even worse, not at all). This also helps to improve your credit score. If your plan is too high to meet it on a monthly basis, we recommend you lower your goal to something you can meet every month, as a way of staying motivated and effective.
Review a Detailed ReadyForZero Monthly Plan Breakdown Anytime
We’ve also added an easy way to see your overall plan broken down by account, suggested monthly account payment (based on your total monthly plan), next due date, and when the account will be paid off. Adjust your plan at anytime to see how it impacts the suggested payments and your individual pay off dates.
Are your loan payments being applied correctly?
One issue we hear a lot about from users is that the paydowns they see on ReadyForZero do not match the payments they made to their lender. This is especially common with student loans, but applies to other types of debt as well. The key here is that not all lenders apply extra payments to principal. Rather, they often use that payment as an advance on the payment for the next month. This feature can help you track how the payments are being applied, so you can be aware if they’re not applied as expected.
The first thing you should do here is check that the total amount paid shown is in line with what you actually paid that month. If those two don’t match, the payments may have been deferred to the next statement (rather than being applied at the time that you made them). The next thing to see is the proportions of principal vs. interest payments. When you’re at the beginning of paying down a big loan, whether a car loan, student loan, or mortgage, most of your payment will go to pay off interest. This is where every dollar you can add to your plan makes a difference! If you see a very low application to principal, try to add just a small chunk ($10 for example) and verify it was applied by checking your graph. Once you see your payments starting to eat into your principal, even if ever so slowly, you can apply more, and that in turn will lower your interest payments significantly over time.
Are you paying more for your debt than others?
If you have more than one account linked, this distribution graph gives insight into the breakdown of your debt. For example, you can see if your debt is mostly credit card debt, mostly student loan debt, or split up between several types of debt. This can help you better understand your overall debt picture.
The APR graph compares your situation to other ReadyForZero users. Based on the info we’re getting from your bank, we’re able to categorize your loans and credit cards and compare them to the APRs of other debts in the same category. Say for example that you have a student loan, with a 7% interest rate. That will show up as “high” in this chart, that means you’re among the ReadyForZero users paying the most for your student loan. (A ‘low’ student loan rate is around 4% among our users). On the other hand, a credit card with a 12% APR will show up as ‘low’, since the median Credit Card is around 17% among our users.
This is an indicator that you might be paying “higher than market” interest rates. In that case, we offer several Loan Consolidation options that you can explore without damaging your credit score.
Powerful, Actionable Data At Your Fingertips
At ReadyForZero, our goal has always been to make your debt repayment easier by putting tools and information in your hands so you can make a plan and execute that plan in the most efficient and speediest way possible.
With ReadyForZero Insights, we’ve taken another big step in that direction, and we hope you’ll give it a try. Click the button below to try it out:
If you’ve already tried out ReadyForZero Insights, leave a comment below to let us know what you think!