The alarming debt levels in America and other parts of the globe haven’t really helped people get rid of the myths that have survived since time immemorial. The financial landscape of the country has changed a lot since the financial meltdown of 2008. Banks, post Recession had only gone on to become more stringent with their lending policies. However, today, with the economy bouncing back to normalcy steadily, banks have become more optimistic and have once again become more liberal with their lending policies. With so much happening, the debtors- however- have continued to cling to the popular misconceptions about debt. With flawed debt awareness, these people have gone horribly wrong with their money as well.
Today in the course of the post, we’ll go on to address these myths. Read on to know more.
Myth #1: My Debt is Good Debt
There is no dearth of consumers who have actually held on to the belief that there are distinct differences between good and bad debts. Let us be very clear about this – there is actually no such thing as a good debt. A good debt DOES NOT exist at all.
Ask the most discerning financial experts out there and they will actually tell you that there is either bad debt or very bad debt. Credit card debts – for example – are considered really bad debts because you have no collateral to protect you against these debts and the rate of interest applicable on these credit cards will actually keep you in debt for a long time. A mortgage, on the other hand, is a tad better debt because of the involvement of the asset in this case. Without comparison – however – it can be safely said that no debt is good debt.
Myth #2: If I take online quick loans I will be in debt forever
This is perhaps the reason why you are actually not getting in touch with Direct lenders for installment loans even if you’re in dire need of money to sponsor some quick needs. It’s true that they carry high rates of interest. However, contrary to what many believe—applying for them is not at all confusing and their customer support team is not inefficient at all. Filling out an application form for online loans should be a breeze if you are getting in touch with a reputed lender. On the other hand, if you have come across stories of customer queries being met with inefficiency or not met at all – then do know for a fact that the ones telling you these stories had not really taken the trouble to check the background of the lenders before getting in touch with them.
Myth #3: I can borrow now since the rate of interest on debts is low
If you are no financial expert then there is no strategic borrowing for you – quite simply because none of us understands strategic borrowing as they do. We should only borrow when we have no choice but to borrow. So if your borrowing need has arose when the rate of interest is low – then simply thank your stars! Nothing should be excuse enough for you to borrow!
You may also be interested in: How to Finance Your New Home
Writer: Ron Johnson
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