The credit Industry actively emtices all comers especially the young and inexperienced, with the price of credit. Critics charge their aggressive practice borders on predatory pending, taking unfair advantage of those who shouldn't be borrowing.
With nearly trillions in unpaid consumer debt, a million household filling for bankruptcy each year (more or less, depending on the year) and a very low saving rate, how can one be free of consumer debt and
Sometime you need more than just a payment schedule to get out of debt. If you're constantly juggling payments, robbimg Peter to pay Paul, or using credit cards to fill in the gaps in your budget, more help may be in order.
DEALING WITH BAD DEBT SO YOU CAN START BUILDING GOOD.
If the borrowed money is simply spent on consumption- vacation, jewelry, or shoe's that you charge on credit card-then that is bad debt. The car loan that you write a check for each month is bad debt. Bad debt are debts you pay out from your own pocket.
Good DEBT are debts someone pays for you. A good business person may borrow money to grow a business. That is good debt if it is paid back out of the positive each flow of business. When you purchase a rental property, you will most likely have a mortgage or loan on the property. If you manage the property. well, the rent from the tenant pays the monthly mortgage payment that is good.
BAD DEBT SUCKS
I had once had a tremendous amount of bad debt. Some was from broke and charging as much as we could on our credit cards just to Survive. More bad debts came from failed business and some from impulse buying livestyle.
It's a horrible feeling to wake up in the middle of the night, worried how you will pay your next house payment or wondering which expenses I may have to give up next. It sucks it caused conflict with me because I kept telling myself "this shouldn't be happening to me!" It also cause within me a bulk of stress.
STUDENT LOAN. BAD OR GOOD DEBTS
Back in 2013, the U.S News/world report, Reported, "in it's nine annual report on student loan debt, Ticas found nearly 7in10 graduating seniors in 2013-69 percent-left school with the average of $28.400 student loan debt. Increase in 2percent from 2012"
Today, things are only worse. As USA today reports, it was news when outstanding student loan debt surpassed credit card debt and then later exceed $1trillion for the first time. That shocking statistics keep climbing, with no sign of slowing down: America now have more than $1.5 trillion in unpaid education debt, according to federal reserved.
And the average student debt burden today? $30,100.
In The U.S the student loan debt crisis is not going away, it's only getting bigger. And that has big implications for our economy.
Perphaps you're slightly shocked by the growth of student debt, but maybe you're also thinking at Least it's going toward a good college education that's a good thing right?
Well, aside from he fact that many graduates don't think their degrees was worth the debt. The reality is that a lot of student loan money doesn't even go towards an education.
According to USA today about half of students blow some of their school loans money on non educational expenses, including 3% who spend it on alcohol and drugs. According to a NOW student loan survey."
You read that right. Nearly 50 percent of college kids take out student loan to spend it on things like.
*Vacations (3%)
*Restaurant (13%)
*Clothes. (15%)
*Car expenses (19%)
*Mounthly expenses like mobile phones (41%)
A TICKING SMALL BUSINESS TIME BOMB?
small business are the heart of the American economy, making 65 percent of the net new jobs over the last fiveteen years according to the SBA office of advocacy, now imagine what will happen to our economy if the rate of new small business creation drop drastically as the rate at which student loan debt has increased.
In this case, the ignorance is regarding debt, the conventional financial wisdom is that college debt is good debt because higher education is important getting ahead. But how's that working out for our nation's graduates' not all well.
FOUR STRATEGIES OF SCOPING WITH STUDENT LOAN DEBT.
(1) DEFERMENT: deferment allows you to temporarily postpone payment on your loan. Whether or not you have to pay interest on the part of your loan that is defered depends on the type of loan. You have eligible reasons for deferment typically include economic hardship or unemployment, military deployment, enrollment in school or an internship program, etc. Since programs change, you'll want to check with your lender or the student loan websites in the resources section to find out if deferment is an option.
(2) FOBEARANCE: if you are temporarily unable to meet your repayment schedule but not eligible for a deferment, you may receive forbearance for a limited and specified period-ussually for up to twelve month at a time for the total of thirty six months. During FOBEARANCE, your payments are postpone or reduced. Whether your loans are subsided or reduced. Whether your loan are subsided or unsubsidized, you will be charged interest. It is very important that you contact your lender. About deferment or forbearance before you fall behind on your payments. If you wait until you are behind, you may not be eligible. Continue making your payments until your deferment is approved.
If you are approved for student loan forbearance or deferment, it Should not be reported negatively on your credit reports, and should not hunt your credit scores.
(3) GRADUATED PAYMENT PLAN: with one of these plans, your payment start out low and will rise overtime. This plan is often good for a student who is just staring out and expect their salary to increase, as they gain more experience. Cautious: one of these plans can stretch your loan out as long as thirty days.
(4)EXTENDED REPAYMENT PLAN. and extended repayment plan allows you to pay your student loan over 12-30 years instead of the standard ten years plan. It is more expensive, but if the lower payments keep you out of default it may be worth it.
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