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$200,000 Student Loan Balance 6% Interest Rate 30 Years $1,199.10 Monthly Payment

$200,000 Student Loan Balance 6% Interest Rate 30 Years $1,199.10 Monthly Payment. $231,677!!!. Effective Interest Rate =116%. Pre payment Example. $200,000 Student Loans 6% For 30 Years $1,199 First Monthly Payment $5,000 Additional Principal Payment

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$200,000 Student Loan Balance 6% Interest Rate 30 Years $1,199.10 Monthly Payment

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  1. $200,000 Student Loan Balance6% Interest Rate 30 Years$1,199.10 Monthly Payment $231,677!!! Effective Interest Rate =116%

  2. Prepayment Example $200,000 Student Loans 6% For 30 Years $1,199 First Monthly Payment $5,000 Additional Principal Payment $6,199 Total First Payment

  3. Prepayment Savings $195,000 New principal loan balance 6% Interest rate $ 1,199 Monthly payment 337 Months $231,677 Original interest paid $203,373 New interest paid $ 28,304

  4. Components of the Program • Installment and Revolving debt • Line of Credit (LOC) – Open-End Loan 3. Wealth Accelerator software

  5. What Makes it Work LOC Functionality • Becomes your primary checking account • Deposit all of your income into LOC • Pay all your bills from the LOC

  6. Sample Family $5,000 Monthly income -$4,000 Living expense (mortgage, car payment) $1,000 Discretionary income

  7. Month 1 $3,500 Starting Balance $4,000 Expenses $7,500 $5,000 Income $2,500 Average Monthly balance Month 2$4,000 Expenses $6,500 $5,000 Income $1,500 $20.83 $12.50

  8. Month 3 $1,500 $4,000 Expenses $5,500 $5,000 Income $ 500 $3,675.77 Lump Sum Payment $4,175.77 Average monthly balance Reduced loan by 18 months 3 month total $68.13 $34.80 Interest Cancellation $17,249 $220.48 $201.10 $ 19.38 ` Principal Jump

  9. Lump Sum Payments: • Every 2 to 6 months • As you pay the LOC down, when the balance is almost zeroed out, the software will optimize when to do another Lump Sum Payment

  10. Month 12 $2,003.68 $4,000 Expenses $6,003.68 $5,000 Income $1,003.68 $2,917.67 Lump Sum Payment $3,921.35 Average monthly balance 12 month total Reduced loan by 53 months Reduced loan by 14 months 12 month total $297.89 $32.68 12 month total Interest Cancellation $50,862 Interest Cancellation $ 10,184 $275.04 $199.10 $ 75.94 ` Principal Jump

  11. Income Income Money Path With LOC Pay Bills Checking LOC Minimum Reserve

  12. Income Income Income Income Optimal balance after Lump Sum Payment Optimal Lump Sum level – pay bills Critical Level How to determine Lump Sum Payments With LOC Strategic Debt Payoff Checking LOC LS Debts PAY Minimum Reserve

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