Every debt is bad
Borrowing money may not be a desperate solution to an empty wallet, but a way to invest well or get a thing that will bring us more profits in the longer term. Of course, these are not loans to pay for an exotic vacation or purchase of consumer goods for debt. Conversely, a real estate mortgage may prove to be a profitable future investment. For example, in the Czech Republic, a mortgage-backed flat will be repaid on average for 23 years, and at that moment you already own a high-value property because the prices of apartments and houses rarely fall. In the same way, you can borrow, for example, a work notebook or other utensils needed for a business that will generate income for you over time.
I can’t do anything with a high interest on an already concluded loan
Did you arrange a loan that looked appealing at first glance, but after a few weeks it turned out to be a very unfavorable business? You don’t just have to silently curse the usury contract at home and continue to pay high interest on the loan. The possibility of running away from a bad credit provider is refinancing the loan. In fact, it is a transfer of a loan from an old provider to a new one that provides better credit conditions (such as lower interest and APR).
Paying only minimal credit card payments is fine
While paying only the minimum amount of credit card debt repayment, you certainly won’t mind the financial institution that provided you with the credit card, you can gradually get in trouble. Because of the cheap source of short-term finance, the credit card becomes a pretty expensive credit when it misses the interest-free period. Therefore, if you have money, always try to pay the entire credit card amount owed.
The bank will not help you when you have problems repaying the loan on time
Do you already know that you will not be able to pay the monthly loan repayment on time? You don’t have to pretend that nothing is happening and wait until you get reminders to pay the amount due. Feel free to pick up the phone and confide in your financial problems with the bank. This will avoid raising fees for sending reminders. In addition, it is very likely that the bank will appreciate your activity and agree with you to settle the situation through a repayment schedule or by postponing the maturity of the debt.
The most important criterion when choosing a loan is interest
What is called a lender when it offers you an attractive low-interest loan? Thank you, it’s definitely not. An appropriate answer is the question of the APR (annual percentage rate of charge), which better reflects the total cost of credit than the interest rate. Indeed, the APR includes all charges related to the loan (fees for concluding the contract, fees for compulsory insurance for the loan, for the management of the loan, etc.). As well as the interest rate, the APR is expressed as a percentage per year, thus allowing a simple and understandable comparison of credit products among themselves.
Counseling for debtors with problematic loans is expensive
When you start to feel that your debts are overgrown and you don’t know how to go, you don’t have to worry about looking for professional help. In specialized counseling centers they will advise you completely free of charge. For example, you can try one of the branches of the Financial Emergency Counseling Center or contact a debt advisor from the non-profit organization People in Need. If you are offered debt counseling for a fee somewhere, turn around and go away. Almost certainly it is an impostor who is just trying to pan the other’s misfortunes.
Once I get into personal bankruptcy, I have no chance of a decent life
Once you fall into a debt spiral and have to ask for personal bankruptcy, it doesn’t mean that you will never get out of the debt trap again and the personal bankruptcy record will haunt you to the end of your life. When you have exhausted other options to address your precarious financial situation (eg, consolidating loans, deferring maturity, etc.), declaring a personal bankruptcy is a solution for your better future. Once you get rid of the debt after some time, you can start again with a clean shield.