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The debt you carry is not simply made up of your monthly payments and interest rates. Many other factors should be considered when you think about the real cost of your debt, including your cash flow, the terms of your loan and your borrowing behavior. Do you know what it really costs when you finance your life?

 

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Published September 24, 2010 Updated: August 7, 2014
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7 responses to “The Real Cost of Your Debt”

  1. Kevin says:

    I want to know what planet has the college that charges a mere $28,000 for four years of tuition. Even the crappiest of crappy state schools in the podunkest of podunk states charge more than that (assuming we’re talking about a four-year college). Perhaps if you could invent some sort of time machine and educate yourself in 1987 that would be possible, but sadly today even a state school will probably cost $50,000-$100,000 for tuition. Over the past two decades the cost of college education has outstripped inflation roughly five-fold, and yet the college degree is, depending on your major, of less value than it has ever been. I know plenty of liberal arts majors who now work in food service, retail and the post office. Plus, if you could create such a time machine you would probably be eligible for a partial scholarship.

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  3. Will says:

    This is a very informative infographic. I think that to give the whole story, however, you would need to take into consideration inflation. The dollar numbers you have are correct, but when a home is held over a term as long as 30 years, inflation can play a huge role in changing the actual value of the loan. Each year the loan effectively loses about 3% value on average, and the compounding effect of this can create a drastically different picture than what you are presenting.

    Overall though, your work is very impressive. Thank you for sharing!

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  6. Thank you for sharing. These types of info graphics are always really impressive and fun to read. It’s stuff like this, that goes a long way towards educating people about the pitfalls of credit cards. Every little bit of information goes a long way. If people saw every time they bought something on credit, we would all be the thriftiest consumers on the planet. The blog I work for just produced a video the other day that also speaks to these issues. You can find it here, http://blog.mangomoney.com/trends/are-you-giving-away-50-a-month I would love to hear what you guys think of it.

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