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Determine How Quickly You Can Pay Off Your Loan
How long until my loan is paid off?
If you feel that you have too much debt, you are not alone. Most people have substantial debt; many have more than they can handle. However, debt is not all bad. Sometimes it makes sense to use borrowed money for investments. However, most folks are not using debt in that way; they are using it to make ordinary purchases of things they would probably be better off without, anyway. In our competitive society, spending has become a status symbol. This encourages people to spend more than they should — more than they have. Consequently, they run up tremendous debt.
While some debt is okay, too much debt is not. So, how do you know whether you have too much debt or not? First let’s look at the different kinds of debt we might incur.
Credit and the Consumer
While credit stimulates the economy, it does have to be used judiciously. Credit is not money. Derived from the Latin word for “trustworthiness,” credit is based on faith that the borrower will repay the debt with real money. One should not use credit in place of money when there is little or no likelihood that payment in real money will be made using credit without the intent or ability to pay is theft.
Today, credit has become a business in its own right. Credit is issued by banks, savings and loans, credit unions, public utilities, and even merchants. According to the Federal Reserve, there was more than $2.5 trillion of consumer debt outstanding by late 2009 this is more than double the amount outstanding in 1994. This represents hundreds of billions of dollars in interest earnings to lenders. This is why credit card companies aggressively compete to get you to use their credit cards and services. The marketing is so aggressive that consumers may lose sight of the fact that this is not free money and make excessive purchases to the point where they find themselves in financial difficulty.
Finding Help In Managing Debt
There are many reasons why people find themselves in financial difficulty. The key to resolving financial woes is understanding why the problems arose, making a plan to resolve the problems, and taking action to get back on track.
In the past, you may have managed your debt well until you lost your job or had a financial setback due to large medical or legal expenses, or investment losses. You may have incurred large debt due to poor spending habits, overuse of credit cards, poor budgeting, or even gambling. Before you can resolve your debt issues, you need to deal with their causes or the problems will recur. Some of these issues you can resolve on your own, while others will require professional help.