How Much You Can Save With A Debt Management Plan

How Much Can You Save with a Debt Management Plan?

A debt management plan (DMP) is an effective way to simplify your finances and accelerate your debt repayment. Most importantly, it can save you a lot of money in the process. How much? Let’s break it down.

Debt Management Plan — Average Savings

Every debt management plan is unique, with different creditors and different account balances. If you’re interested in discovering what a DMP might look like for you, begin a free debt and budget analysis online to receive a personalized estimate based on your actual debts and current budget.

How Does a Debt Management Plan Save You Money?

A debt management plan can clearly save you a lot of money. But how does it work? Here are the basics of how a DMP saves money:

Reduced interest rates

The main reason why you can save so much on a debt management plan is that most credit card companies offer reduced interest rates for participating on a plan.

For creditors, these reduced interest rates are a way to help ensure that you’re able to repay your debt in full. For consumers, however, these lower interest rates can equal big savings — especially if your current interest rates are on the high side.

Every participating creditor offers their own rates, but in aggregate, the average interest rate for accounts included on a debt management plan with MMI is below 7%.

Faster Debt Payoff Times

Debt management plans are typically designed to be completed in less than five years. Part of the tradeoff for creditors reducing your interest rates is that you pay off the debt in a reasonable amount of time.

A DMP works as a debt snowball tool: as smaller debts are paid off, the money going to those accounts is redirected to your remaining accounts, increasing those payments and accelerating your debt payoff.

The average debt management plan with MMI is successfully completed in a little less than four years. Paying off your debts quickly means fewer monthly interest charges. And when you combine that with the reduced interest rates you get for participating on a DMP, you can see how quickly those savings can add up.

And as an added perk, paying through a DMP means that you consolidate all of your debts into a single payment, simplifying your finances and making your monthly budget that much easier to manage.