Have you ever heard of a debt tracker? If you want to tackle your debts in the best way possible, it might be worth using a debt tracker.

Learn what a debt tracker really is and how to use one in our latest post!

What Is a Debt Tracker?

A debt tracker is exactly what it sounds like. It is a way of monitoring your ongoing debts by taking into account the amount of debt owed and any interest you are paying on the debt.

A debt tracker may be an online tool found on helpful websites, a smartphone app, an Excel spreadsheet – or even just a notepad and paper (with a calculator to hand). 

The debt tracker will identify how long it is going to take to pay off your debts. But you can use the information to see what debt strategies may help you get out of debt quicker or reduce your monthly repayments.

For example, if you track multiple debts with a debt tracker, you might realise that debt consolidation or the snowball method will be an advantageous debt solution. 

Debt Trackers Vs Debt Help Calculators

You might see debt help calculators on debt charity websites and debt management company sites. These are not the same as a debt tracker. The former is a tool used to work out how much you owe and what debt solution can benefit your situation – but they are not very personalised. 

A debt tracker is different. It works out your current debt and makes projections based on your current situation. These projections can be then used to consider debt solutions. 

Both can be useful!

Why People Avoid Debt Trackers

Many debtors don’t use debt trackers because they feel like it is a lot of work, or they don’t feel confident in calculating their debts accurately. 

But another reason people don’t use debt trackers is that they are worried about what they will discover. It can be daunting to confront your debts. And working out how much you will be paying back or for how long can sound scary. 

Yet, if these understand worried people do use a debt tracker, they may identify suitable debt strategies and improve their finances significantly. 

What Information Is Included in a Debt Tracker?

If you use a pre-made debt tracker online that does all the work for you, it is likely to ask for the following information. If you want to track your debts yourself using Excel or a notepad, these are also the things to record:

#1: Creditor Names

The first piece of information to record is the names of the creditors you owe money to. It is important to label your debts accurately so you don’t get confused, especially if you have multiple debts. For example, one might be Capital One and the other may be Wonga. 

#2: Debt Types

Sometimes the names of your creditors will tell you what type of debt it is, but sometimes it doesn’t. You should add the type of debt you have with the lender, which may be a credit card, store card, personal loan, student loan, mortgage and so on. 

#3: Debt Amount

Next, you should accurately record the amount you currently owe on each debt. Make sure you input updated figures for this month rather than just the last correspondence you had with your creditor. You might even have to work this out or ask for the amount owed directly. 

#4: Debt Interest Rate

Another crucial detail is the amount of interest you are paying on the debt. Remember to update this aspect of your debt tracker if the interest is set to change. For example, you might be in a 0% APR period on your credit card which is set to shoot up to 19% in a few months. 

#5: Minimum Repayment Required

Next, add the minimum repayment required each month for every debt. This will be helpful if you are assessing if the snowball repayment strategy is a good option for you. We’ll come back to this later. 

#6: Payment Date

And always add the date you must repay by to avoid any late fees or other administration charges.

Utilising the Debt Tracker Results

You can use the results of your debt tracker to make an accurate forecast of how much interest you will be paying back each month and for how long.  

This will help you decide if some debt mitigation strategies are suitable for you, including but not limited to debt consolidation and the snowball method. 

Debt Consolidation

If you track all your debts with the interest rates you can work out the accumulative interest rates of multiple debts and find out if consolidation is beneficial.

Debt consolidation is when you take out a new debt to pay off multiple existing debts. But you only do this if the new debt has a smaller rate of interest than the debts you currently have. A debt tracker will help you identify this.

Debt consolidation is more complex than it sounds and you should always do your research first!

The Snowball Method

The snowball method is when you make the minimum repayment on all of your debts and use any further disposable income to pay off the debt with the smallest rate of interest. This means you will pay off one debt at a time while not missing any other debt repayments. 

The debt tracker can help you work out if this is a good idea and how long it will take to pay off individual debts based on how much overpayment you make each time.

The snowball method has its fans and opposers, but you can read more about it here!

Check Back with Us Soon!

For more helpful information to get out of debt, check back in with the Money Nerd blog, soon!

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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