In most of the cases the biggest problems people have are debt related. Having a mortgage loan or a car loan or any type of loan is not negative in essence, but it is when the amount of your obligations is higher than your income.
Getting rid of all your debts and to be able to increase savings is not a good job. But keep this information in mind:
Making punctual payments
Financial commitment forces you to have enough discipline to settle the dues of each of the loans you have. If I have money problems, I have to pay so that it will not generate additional costs. Suppose I have 400 dollars and I have to decide between paying your rent or the car loan. Not paying the car loan represents an expense of $30 at least; not paying the rent is resolved with a phone call to the landlord stating that this month I will not have a problem and that I will pay on the 5th of the month for example.
Analyze the real costs of all the loans
Let us suppose we have a mortgage loan and a car loan. We will try to pay off the loan that has the highest interest rate as soon as we can. Mortgage loans unlike car loans are mostly long term. Typically, personal loans or consumer credits are usually more expensive than the mortgage loans, so if you have some savings, try to repay the loan that generates the most interests. However, we have to calculate what the savings are of early amortization of a loan, since we are normally charged for these payments.
Not formalizing a loan to pay off another loan.
Do not fall for this trap. You may feel like you are getting out of debt but in reality it has only been restructured. Getting a new loan makes a big hole in your pocket in the form of interest to pay.
And finally, following this advice, only formalizes loans that are indispensable (mortgage loans, car loans, etc) Its easy to fund anything encouraging the purchase and consumption irresponsible. Consume in a reasonable and orderly will make us live more peacefully assumed to have less debt.
Getting rid of all your debts and to be able to increase savings is not a good job. But keep this information in mind:
Making punctual payments
Financial commitment forces you to have enough discipline to settle the dues of each of the loans you have. If I have money problems, I have to pay so that it will not generate additional costs. Suppose I have 400 dollars and I have to decide between paying your rent or the car loan. Not paying the car loan represents an expense of $30 at least; not paying the rent is resolved with a phone call to the landlord stating that this month I will not have a problem and that I will pay on the 5th of the month for example.
Analyze the real costs of all the loans
Let us suppose we have a mortgage loan and a car loan. We will try to pay off the loan that has the highest interest rate as soon as we can. Mortgage loans unlike car loans are mostly long term. Typically, personal loans or consumer credits are usually more expensive than the mortgage loans, so if you have some savings, try to repay the loan that generates the most interests. However, we have to calculate what the savings are of early amortization of a loan, since we are normally charged for these payments.
Not formalizing a loan to pay off another loan.
Do not fall for this trap. You may feel like you are getting out of debt but in reality it has only been restructured. Getting a new loan makes a big hole in your pocket in the form of interest to pay.
And finally, following this advice, only formalizes loans that are indispensable (mortgage loans, car loans, etc) Its easy to fund anything encouraging the purchase and consumption irresponsible. Consume in a reasonable and orderly will make us live more peacefully assumed to have less debt.
About the Author:
Wade Henderson - recognized Professional - 15 yrs in the Business Finance Field - strong reputation for getting the deal done. IMMFinancial.com Commercial Mortgage Mortgage Loans
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