Thursday, April 17, 2008

On Debt Consolidation

Yeah, I know. I wrote about getting an auto loan and payday loans, and now I'm writing about debt consolidation. It's a bit weird, huh?

I'd like to think that debts are not a bad thing. However, it is a totally different thing if you fail to pay your debt on time and if the loan becomes delinquent. It would not only affect your credit rating, but also limit your chances of getting another loan. Which if you think about it in this way, just in case you find yourself in serious need of money, there would be a very few or almost none at all, creditors who would trust you enough to lend you money again.

A bad debt is something that we do not want to have or find ourselves with. A bad debt can lead to bad experiences with collections agencies, can permanently damage your credit rating, and can potentially lead you with no one to run to in case you need cash badly. Debts can be a good ting, but think it thoroughly before you actually go ahead and get one. Think about if you really need it, and also think about how exactly you are going to be able to pay for the debt. Try to compute your disposable income and your expenses plus the payments for your loan or debt. Also make sure that you can pay the debt, and that the terms of payment are mutually beneficial for you and your creditor.

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