"It is only in the country that we can get to know a person or a book."Cyril Connolly
|
| |
Getting a Debt Consolidation Loan
Should you find yourself getting in over your head with debt, you might be a prime candidate for a debt consolidation loan. These loans are designed for those with a heavy burden of debt, and are used to consolidate a large number of debts into a single ...
Knocking Down the Debts with Credit Repair
If you take a hard look at your situation and analyze your debts carefully, you might just find a solution to knocking down the debts. Debts are bills we owe to creditors, someone or source that has extended us a line of credit believing that we will pay ...
Understanding Credit Card Debt Consolidation Loans
If borrowers are asked to vote for the most striking feature of credit cards that appeals them, then increased spending power ought to bag the largest number of votes. In fact this is a feature that distinguishes credit cards from cash, cheque, and the ...
|
|
|
| |
Many people have been taught that you cannot get ahead without debt. We are also inundated with advertising telling us we can have anything we want. All we need to do is put it on our credit card.
We have become an impatient society, we want it right now. We have lost the ethic of working for what we want.
It is not how much money you make; it is what you do with it. By living without debt you can actually have a higher income since you are not paying out interest, you are actually getting paid interest on invested money.
All debt is not created equal. We will classify them as good debt and bad debt.
To simplify the classification we will say that good debt is a loan for something that you could sell at any time and repay the debt. This narrows down good debt to a home loan and possibly a home equity loan.
A bad debt, of course, is a loan on anything that will lose value.
Let's take a look at some debts that we would consider bad debt.
Home equity loans are in the gray area. They could be considered good debt if they are used to repair or improve your home, but you would be a lot better off to just save up the money for the project. Home equity loans become bad debt when used for purposes other than home improvement or maintenance. In other words a bad home equity loan is for anything that does not add to the value of your house. Do not jeopardize your home by taking out a home equity loan on unnecessary items.
One possible good use for a home equity loan is when the interest rates are low. You can use a home equity loan to refinance your mortgage. Home equity loans generally have lower costs than conventional home loans.
We consider school loans bad debt. If you finish school, get a good high paying job and then attack the loan like mad, a school loan may work out. The problem is that there are too many things that can go wrong. At best, even if you do graduate and get a good job there are always a lot of other expenses at this time in ones life. You are really behind financially when you start your working life in debt.
Auto loans are bad loans that have become common practice to us. We pay interest on a vehicle that will only be worth one half of its original purchase price in five years. Lately it has also been common for us to borrow more than a vehicle is worth. We can trade a car in that we still owe on, and roll that owed amount over into another vehicle. This gives us a loan amount that is higher than the value of the car that we drive away. We have lost our capacity to say NO.
Co-signing is a bad debt that usually and unfortunately involves family. If someone cannot qualify for a loan at a regular lending institution, they should not get a loan. The fact that they can't qualify for a loan elsewhere should tell you that they are a huge risk. Use this opportunity to teach them how they can get what they want by working harder for it and delaying the purchase.
If you want to get off of the debt treadmill, you must run as far away from debt as you can. You cannot use debt to get out of debt. Even if you do, you have not changed your habits; you must change your lifestyle.
About The Author
John Cook is a family guy who likes to help people get off and stay off the debt treadmill and secure the financial future of their family. You can read more about securing your families finances at his website www.financeforfamilies.com.
|
|
|
|
|
|
 |
Some Investors Avoiding Low-Yield German DebtWall Street JournalThe appeal of German debt in times of crisis was underlined Wednesday, with an auction of two-year paper—known as Schatz—attracting solid demand. The issue carried a zero coupon for the first time, meaning the bond offers no regular interest payments ...and more » |
|
Card debt still choking low, middle incomesChicago TribuneAmericans have been successful at getting some of their debts off their backs, but many still have a long way to go. Low- and middle-income people are finding an escape difficult as they pay interest on top of interest. Forty percent have turned to ... |
|
