loans, money, finance

Managing Debt

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Another aspect of financial planning should be ensuring that you manage your debt effectively. You should focus on eliminating personal debt, particularly credit card debt which accounts for some of the highest interest rates you may be paying. Make a list of all your debts and list the interest rate you are paying on each debt. Next come up with a plan to pay down your debt, which might to concentrate on debt with the smallest balances first to quickly shorten your list, then focus on those debts with the highest interest rates. Pay more than the minimum payment to expedite eliminating the debt and the amount of interest you pay.

Reminders:

Eliminate personal debt-(particularly credit cards debt which normally have a higher interest rate)

List all debts

Show interest rates for each debt

Prioritize the order of payments- A) Consider paying debt with smallest balances first, then focus on debts with the highest interest rates. B) Pay more than the minimum payment C) after paying off debt, divert money previously used for paying off debt to savings or investment.

25 thoughts on “Managing Debt”

  1. I think that a property foreclosure can have a major effect on the borrower’s life. Real estate foreclosures can have a 6 to 10 years negative relation to a debtor’s credit report. A borrower who’s applied for home financing or any loans for instance, knows that a worse credit rating can be, the more difficult it is to have a decent personal loan. In addition, it can affect a new borrower’s ability to find a respectable place to let or rent, if that becomes the alternative real estate solution. Good blog post.

    1. Yes, you are absolutely correct about the impact of foreclosure on a borrowers credit..We end up paying higher interest rates for years while banks and loan companies get rich.

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