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Breaking the debt cycle is difficult, but it can be done

With the credit crunch that has put many lenders into true closure mode, becoming increasingly cautious about granting new loans to anyone with a shred of past personal struggles, it becomes increasingly difficult for many people to obtain the loans that in many cases they need. survive, in large part due to their previous dependence on loans. Many institutions have sprung up to handle this huge downtrodden market, in the form of secured loan companies and payday loan companies. These companies charge massive interest rates because they know that clients who will need their services will have no other options. This may not be the case, and we’ll take a closer look at these companies and show how you can stay out of their clutches.

These high-interest lenders prey on your insecurities and the fragility of your situation. They want you to see them as the brilliant white knight here to save you in your darkest hour when no one else will, and that you are lucky they are giving you the time of day. The truth, of course, is the opposite. They are anything but a savior, charging rates that almost guarantee their downward spiral will continue, even on small loans. They want you to feel like you are lucky to be dealing with you, which is silly.

These companies will only give you a loan if you give them a guaranteed deposit against the loan (in other words, you are not even getting a loan, you are paying sky-high interest on your own money) or a later date check so they can withdraw money from your it counts the second you arrive on your next payday. As such, these companies take virtually no risk in dealing with you.

For the risk they take, they should provide you with the lowest interest rates on the market, but of course they don’t, because they don’t have to. You need them. Of course they will take care of you, who wouldn’t under the circumstances? These companies are not saviors; they are leeches, sucking the life out of their nearly dead hosts.

What you need to learn is that you don’t need them and these companies won’t help you. Getting a $ 100 payday loan to buy food will only leave you short $ 150 for food the next month, even with bad credit, a debt consolidation loan is a better deal. You have to break the cycle or, ideally, never get into it with them. If that means selling something to buy food, so be it. If that means eating nothing but bread and peanut butter for a month, so be it. You have to determine what is important to you. A lifetime of debt, stress, and struggle, or a short-term sacrifice for the greater good?

With effort, you can get out of debt and turn things around. If you have to sell some of your possessions or make big cuts in your budget to do so, you should not even hesitate. Not doing it is simply costing you 50% more of everything that lies ahead. Selling a $ 1,000 stereo for $ 200 might seem like a massive loss, but if it stops you from getting into an endless cycle of bad loans, it could save you thousands of dollars in just a few years.

Reduce your debt, work to improve your credit score in every way possible, and leave these bad loans and bad lenders in no-man’s land, where they belong.

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