How Much Debt Can You Handle?

07/16/2011

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Debt
Of all the financial imaginable, the grimmest is falling too deeply into debt. You do not have to be poor to get bogged down in excessive borrowing. Yet there is no reason to slip in beyond your means. Fortunately, there are ways to figure out how much debt you can comfortably handle.

Think hard about whether you really want to borrow at all. It is not cheap. short-term rates on personal loans not backed by collateral averaged 17% in mid-1989, and with inflation at moderate levels, you no longer can count on paying back creditors in significantly cheaper dollars. But Some Debts Can Be Good For you too. Not all debts are bad.
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How To Solve Your Home Loan Troubles : Know How To Handle It!

08/14/2010

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Home Loan
Your home loan is usually the largest debt you have. With substantial monthly payments extending over 30 years or more, it can be very hard to catch up if you miss payments. while most lenders will try to help you keep your home, the farther you fall behind, the more they are limited in what they can do.
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How You Can Set Aside Money and Track Cash Flow

05/29/2010

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Budgeting
It takes a bit of planning and some extra bookkeeping to make sure that money is there when a big bill -such as property taxes - comes in. In writing your budget, you provide the items by creating an artificial monthly amount. That's fine, but that money can give a false sense of well-being in the budget as it accumulates. Also, there's a strong temptation to fudge on those accounts if it isn't quickly obvious that you're running behind. On the other hand, the funds may build up to an amount that really should be working for you by earning interest. Finally, there is a question of timing: in the first year, you need to make sure that you've built up money fast enough to meet the bills that arrive early in the year.
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Bill Consolidation Loan:The Advantage and Disadvantage

05/08/2010

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Loan Offer
The advantage Side On Bill Consolidation Loan

A family that piles up debts from many areas - such as credit cards, bank loans, and finance company loans - is faced with a choice: to stop the flow of credit and reduce spending to pay off the debts, or look for new sources of money.

One of these  sources is called a bill consolidation loan. The purpose is to combine several small debts into one large loan so that the payments can be spread over a longer period of time, thus reducing the monthly outgo. Most finance companies encourage such loans especially when one of their existing loans will be refinanced. Why? Because the amount refinanced includes not only principal but some of the interests as well, so they actually earn interest on the interest.
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Debts: Some Debts Can Be Good For You

05/04/2010

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Good Debts
I'm not going to lecture you. You know all about the downsides of debt. You know that you shouldn’t run up a credit-card tab for a trip to Tahiti, and you know that such behavior has helped you push bankruptcies to an all-time high. But all the doom saying and admonishment about debt has obscured a dirty little secret of financial planning. Sometimes debt is good.

In fact, you can go overboard avoiding it. Eschewing debt at all costs, experts say, could actually prove quite costly if it leaves you with no cash in reserve for an emergency. “No one can say, ‘I won’t lose my job.’ Or ‘The hot water heater? Nah, that never breaks,’” warns Debt Counselors of America. “There’s always an accident waiting to happen.”
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Good Dept: When Is It OK to Borrow Money?

12/19/2009

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Debt is not necessarily bad. If you use it to buy real needs or to leverage an asset acquisition, debt can help increase your wealth. For example, if you are able to buy a house, you will be able to save on rent, and increase your assets.

It could take you time to come up with the whole amount to buy a house. But if you have enough money for down payment, and if you can pay for the monthly amortization and maintenance costs, you can buy your house by borrowing. so instead of shelling out money for rent, you can pay the amortization for your loan and accumulate savings by way of owning an asset: your own home. This is good debt and it helps increase your wealth.
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