Debt Consolidation Calculator - Estimate Potential Savings | Discover (2024)

FAQs

What percentage will Discover settle for? ›

Summary: To settle debt with Discover, first respond to any lawsuit with an Answer to avoid default judgment. Then, assess your financial situation to determine a realistic settlement offer, ideally 60% or more of the total debt. Discover may negotiate, so be prepared for counteroffers.

The monthly payment on a $7,000 loan ranges from $96 to $703, depending on the APR and how long the loan lasts. For example, if you take out a $7,000 loan for one year with an APR of 36%, your monthly payment will be $703.

If you do it right, debt consolidation might slightly decrease your score temporarily. The drop will come from a hard inquiry that appears on your credit reports every time you apply for credit. But, according to Experian, the decrease is normally less than 5 points and your score should rebound within a few months.

Some of these factors include the time since your last payment, the total amount owed, whether your account is with the original creditor or a collections agency, and how much you can afford to pay. Typically, you should offer 60% or less of your debt amount to kick off negotiations.

Although the average settlement amounts to 48% of what you originally owed, that number is a bit skewed. If your debts are still with the original creditor, settlement amounts tend to be much higher. You can end up paying up to 80% of what you owe if the debt is still with the original creditor.

Representative Example

Representative 6.1% APR, based on a loan amount of £10,000, over 5 years, at a Fixed Annual Interest Rate of 5.9358%, (nominal). This would give you a monthly repayment of £193.02 and a total amount repayable of £11,581.20.

Some lenders state they require stable, consistent income, while others list a minimum income requirement. For example, Discover requires a household income of at least $25,000. Finally, personal loan lenders consider your DTI ratio or your ratio of debt to gross income.

Most lenders prefer borrowers with a credit score in the good to excellent range (670 or higher), indicating a history of responsible financial management.

How much income do you need to get a $500000 loan? ›

In today's climate, the income required to purchase a $500,000 home varies greatly based on personal finances, down payment amount, and interest rate. However, assuming a market rate of 7% and a 10% down payment, your household income would need to be about $128,000 to afford a $500,000 home.

Requirements for a $5,000 loan vary by lender. But in general, you should have at least Fair credit, which is a score of 580 or above. Lenders may also look at other factors, such as your income and your debt-to-income ratio (DTI), during the application process.

Your debt consolidation loan could come with more interest than you currently pay on your debts. This can happen for several reasons, including your current credit score. If it's on the lower end, lenders see you as a higher risk for default. You'll likely pay more for credit and be able to borrow less.

If a credit card account remains open after you've paid it off through debt consolidation, you can still use it. However, running up another balance could make it difficult to pay off your debt consolidation account.

Offer a Lump-Sum Settlement

Some want 75%–80% of what you owe. Others will take 50%, while others might settle for one-third or less. If you can afford it, proposing a lump-sum settlement is generally the best option—and the one most collectors will readily agree to.

What percentage will credit card companies settle for? Creditors often accept 20% to 100% of the outstanding balance. The actual amount they are willing to settle for depends on individual circ*mstances and negotiation skills.

Credit card companies can garnish (take) your wages just like most other creditors. But before taking part of your pay, the credit card company must first sue you in court to get a money judgment and a court order directing your employer to deduct funds from your pay.