How Debt Optimization Works

Debt Optimization is the process of moving debt around within your portfolio to optimize the interest paid position (to minimize the amount of interest paid by the user) and the time to pay position.

A good example of this is to look at a credit card with a high balance and a high interest rate. If that balance could be moved to a card with a 0% rate then the debt could be paid much faster and with no interest charges during the 0% term.

With lower APR's being paid first, it is optimal to pay the higher APR balances first before transferring money into the lower APR account. This keeps the borrower from accruing high balances while the money is being paid to the lower APR's.

NO money is paid to the higher APR balances until the lower APR's are paid in full. The optimal position to be in is often very difficult to see due to the fact that it may take several steps (moving debt and money around) from one account to another, followed by moving that money around again, to achieve. Our tool does this for you.