Patent ID: 7707104

Claim:
A system for determining an indicator or its derivative, reflecting whether to refinance an outstanding consumer debt instrument with a new consumer debt instrument, said outstanding consumer debt instrument and said new consumer debt instrument each having a cash flow having a resent value and an option value, said system comprising: a CPU; a computer code operatively associated with said CPU, which when implemented causes a series of actions, said computer code comprising the following instructions: a first set of instructions, said first set of instructions configured to calculate a change in said present value of the cash flows using a set of discount factors; a second set of instructions, said second set of instructions configured to calculate a change in option values using a probabilistic model of future discount factors; and a third set of instructions, said third set of instructions configured to calculate the indicator by comparing said change in cash flow values with said change in option values; an input device operatively connected to said CPU, said input device configured to receive or obtain said discount factors and said probabilistic model of future discount factors and configured to transmit them to said CPU; and an output device operatively connected to said CPU, said output device configured to provide said indicator to a user or a third party.