Although many people consider debt to be their biggest financial problem, it is really often a symptom of other long term financial issues. It’s true that some people run into unexpected situations, lose their jobs, or can’t make ends meet for legitimate reasons. However, many of us fall into another category. We feel like we can’t make ends meet but it is really do to inefficient, ineffective, or just the lack of financial planning and budgeting.
This post is written for those that have already gone down the wrong path or that find themselves with very few options to get financial help. Debt relief is not easy and the following should be considered.
Good Debt is Hard to Find
If you are already in financial trouble then good debt is going to be hard to find. Good debt comes from the more traditional sources like financing a mortgage, a car, or other asset backed debt. If these sources are not available many people turn to the unsecured debt market, which includes credit card debt. Here you can find a list of the best unsecured personal loans for 2017. Many of these unsecured loans are provided by specialized debt companies. This debt relief company review site is an example of where to find such loans.
Debt is Expensive
The more you need it the more it costs. In other words, when you are in financial trouble it gets harder and harder to find a loan. And when you do find a loan, it is often at extreme interest rates. We all know that credit card rates can easily reach the mid teens. Other sources of unsecured loans can get even higher. They are also expensive because of the payback periods. For example, some unsecured loans are for only a few weeks. If you add up the transactions costs and interest expense, the effective interest rates can easily top twenty five percent.
Debt Makes it More Difficult to Reach Your Financial Goals
The final consideration you should think about before taking on debt is whether or not you will be able to pay it off. The issue is that the more debt you take on, the higher your monthly interest and debt payments become. The higher your monthly payments the less money you have left to manage your personal finances. I’m sure you can see where I’m going with this, but the real solution would be to change your financial behavior so that you can stop taking on more debt and find a path back to financial freedom.