Cost of new debts
The cost of new debts can be significant and can vary depending on several factors, such as the type of debt, interest rate, and repayment terms. Here are some examples of the costs associated with different types of debts:
- Credit Card Debt:
- Average interest rate: 15% - 25%
- Late payment fee: $25 - $35
- Overlimit fee: $25 - $35
- Annual fee: $25 - $100
- Total cost of debt: 15% - 25% of the outstanding balance per year
- Personal Loans:
- Average interest rate: 6% - 36%
- Origination fee: 1% - 5% of the loan amount
- Late payment fee: $25 - $35
- Total cost of debt: 6% - 36% of the loan amount per year
- Student Loans:
- Average interest rate: 4% - 8%
- Origination fee: 1% - 4% of the loan amount
- Late payment fee: $25 - $35
- Total cost of debt: 4% - 8% of the loan amount per year
- Mortgage Debt:
- Average interest rate: 3% - 6%
- Origination fee: 0.5% - 2% of the loan amount
- Late payment fee: $25 - $35
- Total cost of debt: 3% - 6% of the loan amount per year
- Auto Loans:
- Average interest rate: 4% - 10%
- Origination fee: 1% - 3% of the loan amount
- Late payment fee: $25 - $35
- Total cost of debt: 4% - 10% of the loan amount per year
In addition to these costs, there may be other fees associated with debt, such as:
- Balance transfer fees: 3% - 5% of the transferred amount
- Cash advance fees: 3% - 5% of the cash advance amount
- Foreign transaction fees: 1% - 3% of the transaction amount
- Late payment fees: $25 - $35
- Overlimit fees: $25 - $35
- Annual fees: $25 - $100
It's important to carefully review the terms and conditions of any debt agreement before signing, and to make timely payments to avoid additional fees and penalties.