Category Archives: Debt

How to Pay Off Student Loans

Taking out student loans is a fairly common practice. Many young people do this for the sake of investing in their education or otherwise being able to attend college or university. Initially, being able to take out student loans and attend college may seem like a dream come true. However, this dream can quickly turn into a nightmare when young people are not only billed for the money they borrowed, but also the subsequent interest fees which come along with it.

Virtually everyone has heard of the countless horror stories of young people who spend decades or even lifetimes attempting to pay back their student loans. Thankfully, there are some helpful tips for those who wish to pay off their student loans in a reasonable time period and enjoy the upsides of being debt-free and financially well-off.

Look Into Certain Occupations

Student Loan Hero explains that there are various occupations which offer certain mandates in exchange for forgiveness of borrowed funds. Usually, jobs of this nature fall into the category of teaching or providing some other type of public service. However, taking advantage of such an opportunity requires more than simply applying for the job and being accepted. In most cases, these type of occupations also require work terms in addition to various mandates.

Finally, if an individual is ineligible or otherwise barred from receiving student loan forgiveness, they will have likely incurred additional interest fees during the time they spent towards acquiring forgiveness. For this reason, students should always look into whether or not they are eligible for this opportunity prior to pursuing it.

Make Certain Lifestyle Changes…at Least Temporarily

Rarely does anyone enjoy changing their lifestyle for the sake of having to pay back previously borrowed funds. However, the reality is that student loans must be returned, one way or another. Hence, Nerd Wallet advises young people to look for various ways to reduce their expenses and put the extra money towards paying off their student loans.

This doesn’t mean that individuals who owe student loans can never go to the movies or dine out; however, they would do well to perhaps engage in these activities less frequently or find similar ways to decrease what they owe to the government. This is can be done by either decreasing expenses or increasing income. Ideally, if both changes are successfully implemented, young people will be able to pay off their student loans at a much faster rate and save thousands of dollars, if not more.

A Final Word

The amount of young people who owe student loans is increasing each and every day. For this reason, more and more individuals are questioning whether or not college is truly worth it. Nevertheless, those who have already incurred loans will have to pay them off, one way or another. Many young people make the mistakes of either delaying payments or only paying the minimum amounts. This is not conducive to financial or economic success.

Finally, individuals who believe they can cheat the government out of getting returns on borrowed funds should tread very carefully. People who play this game never really win; the government almost always get their money back — on top of the sky-high interest fees.

 

Authored by Gabrielle Seunagal

How to Recover From Bankruptcy

Millions of individuals have filed for bankruptcy since its inception. This may come as a shock to many people who generally view bankruptcy as a state in which irresponsible individuals find themselves. Although bankruptcy occurs when someone is unable to pay their debts, there are a variety of circumstances and decisions which can bring about this unfortunate situation.

According to Investopedia, medical expenses, employment loss, excessive spending/misuse of credit cards, marital divorce, unforeseen financial emergencies, and more expenses than revenue are some of the most common factors which have prompted bankruptcy. In the best case scenarios, people would proactively take steps to avoid digging themselves into this hole, but the best scenario is not always the one which ends up playing out.

Thankfully, there is still hope and various ways in which people can recover and otherwise break free of the bondage that is bankruptcy.

Pinpoint Your Financial Habits Which Prompted Bankruptcy

Many great minds have stated that those who fail to learn from history and past mistakes are doomed to repeat them. This is especially applicable to financial habits and money-related decisions. As a matter of fact, U.S. News recommends people to evaluate their financial choices and pinpoint exactly what led them into bankruptcy. Someone who went bankrupt because of debts should actively seek out additional revenue streams. An individual who experienced bankruptcy due to an unforeseen emergency should be sure to habitually put aside funds in the event of unexpected expenses. Failure to prepare is, in essence, preparation for failure.

Make Payments with Cash or Debit ONLY

So many cases of bankruptcy can be traced back to people living way above their means and constantly swiping credit cards for things that they can’t afford. This type of reckless spending is extremely problematic and will certainly kill any potential for forthcoming financial gain and security. Therefore, making payments exclusively with cash or debit not only prevents excessive credit card use, but cash and debit payments furthermore motivate the individual to earn the necessary funds to cover their expenses.

Credit cards can be beneficial if the person exercises discipline and self-control. As a matter of fact, many companies have advised individuals who are recovering from bankruptcy to use credit cards. However, a person who still lacks the control to not swipe, swipe, swipe the card at every turn will probably do well to simply make cash or debit payments. After gaining some financial security and acumen, one can then look into applying for a credit card.

Relinquish Self Blame

Although taking responsibility for one’s actions is paramount, so is not falling into the trap of negative self-talk. Bankruptcy is not fun, nor is it an easy state to be in; therefore, many people can eventually begin to feel perpetually discouraged. This feeling will not change bankruptcy, however, excessive self-blame does have the potential to distract from steps that the individual could take as they work to improve their financial health.

Remember…getting knocked down happens to all of us, but the decision to stay down is entirely different. There is always room for self-improvement. It all begins with you.

 

Authored by Gabrielle Seunagal

The Dangers of Borrowing Money

Virtually everyone has found themselves in a sticky financial situation. Unfortunately, it can happen to even the best of us. Sometimes emergencies happen, unexpected events take place, and without the proper savings, these occurrences can seriously disrupt our budgets and financial health. In cases like the aforementioned, the temptation to borrow money from a relative, friend, or financial institution can be great. While borrowing money has helped people in certain situations, an awareness of the potential and probable dangers is still paramount.

Interest Rates Can Be Astronomical

Assuming that an individual does not receive a loan from a relative or friend, they are almost guaranteed to owe interest on top of the original amount of borrowed funds, affirms Credit. When lending services loan money to customers, they are not doing it to help the person in need. Lending services are loaning out money to help their own company and make a profit. Therefore, in many scenarios, borrowing money can be even costlier than simply going without whatever the borrowed funds were intended for.

Nine times out to ten, lending services are not the best places to seek financial loans. It is almost always better to seek out help from a family member or trusted ally. However, even this can come with potential risks and pitfalls.

Personal Relationships May Experience Tension

While borrowing money from personal friends and relatives comes with less financial risk, the act can potentially breed tension within relationships between loved ones. Most people loan money with the expectation that they will be paid back, preferably within a certain time period. Issues definitely have the potential to arise if someone is told they will be paid by within a certain time period and then it does not happen.

Therefore, Credit furthermore suggests for both parties to have written agreements whenever borrowing money occurs. Although some people may view the aforementioned agreements as unnecessary, written terms can ensure that both parties are clear and aware of each other’s expectations. A written agreement can also serve as a great reference in case one or both people become confused or uncertain of the original terms surrounding the borrowed capital.

In the best of situations, a person who borrows money from his or her relatives or friends pays back the money within the agreed upon time. Unfortunately, not all scenarios play out as they ought to. Some people borrow money from loved ones without ever intending to pay it back. Other individuals borrow funds with the intention of returning them at a later date, only to find out that they can’t do so for whatever reason. Each of the foregoing instances is very problematic and can engender serious issues. Depending on the situation, relatives or friends may be within their rights to sue the person who has borrowed money and failed to pay it back.

A Final Word

The preceding, potential circumstances are why each person should tread carefully regarding borrowing money. Sometimes going without something is better than finding oneself in massive debt or having a treasured relationship ruined.

Authored by Gabrielle Seunagal

Basic Money Handling Tips

The ability to handle money appropriately has never been more imperative. In this day and age, people who are aware of just the most basic ways to manage capital do significantly better than individuals with poor money management skills. The perks of managing capital appropriately are well documented. Any individual who is serious about his or her financial future would do well to learn some of the most basic, yet paramount money handling tips.

Don’t Spend Every Dime You Earn

Virtually everyone has heard someone say that they want to “make more money.” The desire to increase one’s earnings is universal, however, the manner in which one handles the extra capital is what truly makes the difference. Far too often, when someone’s earnings increase, so does their lifestyle. For instance, an individual who receives a raise from his or her boss may then feel the inclination to spend more money. In their mind, why shouldn’t they? They’re making more money and can afford to be less frugal, right? Wrong! Far too many people have this mindset and it hinders them from considerable financial growth.

As the old saying goes, “if you make a million and then spend a million, you’re still broke.” A person who is serious about handling money appropriately should first and foremost put more money aside towards savings or fruitful investments when they see an increase in their earnings. This is not to say that one can never upgrade their quality of life, however, it needs to be done in moderation and with steady progression. Anything more is a recipe for financial disaster.

Don’t Go Into Debt

Similarly to saving and investing capital, landing in debt is another one of the most common financial traps that many people fall into at one point or another. It is only human nature to desire nice things and enjoy a certain lifestyle, however, the finer amenities of life must be earned. This is a concept that many individuals fail to realize. The temptation to swipe one’s credit card repeatedly feels great until the bill comes due and the person can’t pay it. All of a sudden interest kicks in, on top of the original debt, and the cost of a $400 wallet is now $20,870.76 by the time it is completely paid off.

Debt and interest are the enemies of financial success and should be avoided at all costs. Those who wish to experience the best that life has to offer must do so by increasing their earnings in one way or another. There are many ways to create passive income streams, including driving for Lyft or Uber in one’s free time, renting out spare rooms on Airbnb, or doing freelance work on a site like Upwork. Regardless, debt should never be incurred. Persons who are already in debt should work to pay it off immediately.

A Final Word

While the list of money handling tips could go on indefinitely, not spending every earned dime and abstaining from debt are two of the most crucial methods of achieving financial success. Although the foregoing changes can be challenging at first, they ultimately depend upon one’s level of discipline, wisdom, and execution.

Authored by Gabrielle Seunagal

Personal Loans Improve Credit and Might Pay Off Debt

Why take out a personal loan when you’re not sure if it will benefit you? The answer is simple–there are programs that just might and it doesn’t hurt to try ones that have no impact on your credit score. There are bad personal loans for those with damaged credit. If you use these wisely (and choose the right ones) you can repair your credit and begin paying off debt. This can help you get back on the right financial path, but you must be willing to make sacrifices. We never recommend taking out a personal loan just to have extra funds available. But, we do recommend going this route when you need to pay off debt and begin shining up your credit report. Installment loans work best and often have the lower fees and most flexible repayment options.

For consumers who have maxed out credit cards–this can be an excellent option. But remember–not just to increase cash flow. It should be vice versa. Also, if you want to consolidate debt this is a viable choice. This works well if you hope to do away with credit cards and other loans that have unreal interest rates. You do want to weigh all the pros and cons before you sign on to a short term loan like one we are describing here.

The Pros and Cons of a Short-Term Personal Loan

What you might not know is that short term loans can help you repay debt and pay off other loans that might have higher interest rates. Now, when it comes to the repayment of the loan, depending on what type you took out determines the duration of repayment. However, short-term loans almost always have feasible options that work for anyone. You can choose an option that will be the easiest for you when it comes to repayment ability and/or any personal circumstances you have. A loan officer will work with you on these circumstances.

So a short term loan approval offers easier approval for most, and gives you a short period of time to pay back without higher interest costs.  Some variations of short term loan repayments are normally 6 months to 1 year.  Now, long-term is quite different, and offers other options that might provide more flexibility too.  We do want to point out that there is a difference between a payday loan and a short term loan.  Remember, it offers more flexibility.

Just remember, simply because you need funding fast doesn’t mean it is wise to jump on just any short term loan or payday loan.  You need to weigh your options and understand them clearly.  Talking to the right people makes all the difference and can save on repayment penalties and other service charges.