At the time you took on that student loan or opened that credit card account, you vowed to be financially responsible. Each payment would be made on time. You would never borrow more than you can afford to pay back. Then life happens, and you now find yourself under a mountain of debt.
Here are 10 reasons why you may have stay in debt longer than you think:
1. Clueless About Debt Amount
You have no clue exactly how much debt you owe. Yes, it can be a scary number to look at but knowing it makes you own it. When you own it, you can manage it.
2. Bare Minimum Payments
You are only paying the minimum amount on your credit cards, extending your credit card debt by approximately 27 years. It ends up being making a single charge twice the initial purchase amount.
3. Unaffordable Mortgage
Your mortgage most likely equals more than half of your monthly income, making it quite a financial strain. You can decrease this fiscal burden by trying to increase the amount of your monthly payment.
4. Student Loans
Your travel down the road to higher education came with a hefty price tag. You can’t escape student loans but you can seek help with repayment options that may be available to you.
5. Can’t Say ‘No’ to Kids
You, like most parents, want your children to be happy. So you willingly go into debt for things like college tuition, extracurricular activities and car to make this happen.
6. No Emergency Fund
You have not made an emergency savings fund so when an emergency happens, you borrow from family or friends or you charge the expenses to your credit card.
7. Sense of Entitlement
You work hard and feel that hard work should entitle you to whatever items you would like. A new car is financed. New clothes and electronics are charged to your credit card. You do all of this without a viable repayment plan in place.
8. Extensive Car Loan Term
Your new car purchase came with a seven year repayment loan. It seems like a good idea at the time, however the additional interest you will incur during this period will extend the time you remain in debt.
9. Late Fees
Paying a $25 late fee on your credit card payment may not seem like a big deal at the time. However, consider the fact that over one year, that equals $300 and is money you could have spent lowering your overall debt burden.
10. High-Interest Rates
The higher the interest rate on your loans means you will be in debt longer. Your payments will go towards this interest before it touches the principle, thereby extending the time frame of your loan.
Start working on your debt with your student loans. Contact us today to see if you are eligible for student loan forgiveness.