Bad Credit Debt Consolidation Loan
Debt Consolidation Loans for Bad Credit
Nowadays, many people can get into a bad credit situation if they do not keep track of their income and expenditure. Many young executives suddenly find that they are being offered credit cards by various...
Finding A Company To Consolidate Debt
A debt management company can consolidate your debt and lower
your interest rates by negotiating with your creditors. Debt
management companies can also help you pay off your loans
sooner. But before you sign up with a company, make sure...
Guide to Unsecured Debt Consolidation Loans
While approaching loan provider for an unsecured debt consolidation loan , there
were several fears in your mind. Many of your colleagues were
against unsecured debt consolidation loans because of the very
high rates that they come with....
Negotiate Your Debt Before Buying a Home
The temptation of getting into the runaway housing market is understandable. Simple savings accounts are returning less than 2% per year. CDs and bonds are not much better. "Safe" funds are yielding 5% pre-tax. And real estate is surging, offering...
New Mom...New Baby...New Debt??
Ah, there is nothing like being an expectant mom. Along with your expanding waistline comes the ever growing list of products for you and your new bundle of joy. Preparing for a new baby can be a costly experience, especially in the areas of...
Do You Have Debt - Then Don't Save
Humans are funny creatures. We don't always do what's best for
us - instead, we do what feels best at the time, and try to
blank out any reasons why it might not be the best thing to do.
It's called self-justification. Or just plain illogical to many.
Maybe that's why there are so many people who have both savings
and debts.
A Matter of Psychology
Yes, it feels better to save. Saving feels like building a
foundation for your future, while paying off debt feels like
throwing your money down the drain. That money is for the kids'
education, or for improving your house, or whatever else - and
it's in an account earning a good rate of interest. What could
be wrong with that? Absolutely lots, if you have debts.
Don't Be Fooled - Here is a Real Life Factual Example
There are almost no savings accounts that offer interest rates
as high as the ones credit cards charge. Here's a question: if
you have $10,000 in a savings account earning 5% per year and
$5,000 on a credit card at an interest rate of 20% per year, how
much money do you have? After just five years, the answer is
effectively $0 - your debt would have grown to around $12,500,
the same amount that your savings are now worth.
You might not believe it now, but it really is much better to
pay off your debt. If you used half your savings to pay off that
debt, you'd be in such a better position that it's really
amazing. You avoid five years of compound interest on the debt,
but you still get to keep $5,000 in your savings account,
earning interest - after five years, that's about $6,380.
If you'd still rather keep your savings intact instead of using
them to pay off your debts, ask
yourself this simple question:
is your pride worth $6,380 of your family's money?
Think of Your Financial Health
When you have enough money to pay off your debt, there's
absolutely no reason to keep it. Debt is for people who don't
have the money, and need to borrow it. Debt costs money, and
savings make money - you want as much of your finances as
possible to be savings, not debts. If your savings account and
credit card are with the same bank, then you're effectively
paying for the privilege of borrowing your own money from them.
Why would you do that?
There are other benefits to paying off your debt with savings.
You'll be less stressed about your debts, and your credit report
will show that you were able to pay everything back - getting
you a much better interest rate if you ever need to go into debt
again.
I know it can be hard. You just have to remember that any money
you've 'saved' hasn't really been saved at all. It's money you
should have been spending instead of making purchases with a
credit card. Yes, it feels much worse to spend money thinking
that you're spending away your future - but always remember that
when you use a credit card to spend that same money, you're
spending away your future, plus interest. Anyway, if you've got
the debt, then those savings have already been spent - stop
denying it to yourself.