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Debt Cafe Resource Directory
Thursday, July, 24th, 2008 |
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Freedom from Debt
Is there such a thing? I mean who is really free from debt? Granted, today’s society has made it easier and easier for families to rack up a large amount of debt, but there is a better way of life that can be had when you are debt free.
The problem with debt is that it costs the debtor a lot of money in interest charges and monthly payments. For many, these monthly payments become unbearable during times of economic hardship.
The truth is that this situation has led many to file bankruptcy. In fact, bankruptcy filings are at an all-time high, which has forced legislatures to review the leniency of bankruptcy laws. Yes, the laws are changing, and for many, bankruptcy is not an option anymore. But was it ever really a good option?
Bankruptcy has always been and should always continue to be the last resort used to solve financial problems. Bankruptcy leaves a stain on your good name and credit that does not go away quickly.
But what can you do when you are faced with high debt and are struggling to make ends meet? The answer could be as simple as consolidating debt. Consolidating your debts can not only lower your monthly financial obligations it can also help you get out of debt quicker by lowering your interest payments.
Think about it this way. A credit card that carries a 29 percent interest rate can cost you nearly $50 in interest each month if you carry a small balance of only $2,000. And most credit card companies figure your minimum monthly charge by calculating the interest and tacking on just 1 percent of your principle balance owed. If you can only make your minimum payments, you could end up wasting thousands of dollars in interest charges.
A debt consolidation loan combines all of your high-interest credit into one account with a much lower interest rate and it even lowers your principle payments owed each month. That means that you could have a few hundred dollars or more a month after consolidation that you had before it.
And you can use all of this extra money to pay off the principle balance on your debt even quicker. See, there is a debt-free life, and it’s just around the corner when you consolidate your debt.
Related Resources:
Some Solutions
Having huge debts is a risky financial behavior, since any emergency can cause your debts to very quickly become a huge burden.
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