Four Ways Creative Thinking Can Eliminate Debt

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Financial debt is usually a very heavy stress factor in the lives of most individuals and families. The reasoning behind that is very simple.


This problem is further compounded with a high degree of consumerism which is prevalent in the U.S. A good percentage of Americans try to live above their means, be it the car they buy or even the house. This has lead to some very creative debt instruments which they can tap into. If just the minimum payment of a credit card it made every month, the card will not be paid for over thirty years. Then there are housing loans which have a Interest only payment option, which means the home owner has the option of paying only the Interest every month and the principle balance never gets reduced and since most use this option on a frequent basis, the balance on the debt remains at close to the initial level. And in the past few years, a new debt instrument has come up which actually allows debtors to pay less than the interest amount , which means that the principle balance can actually go up. How does this impact anybody wanting to take a loan to buy something Let us suppose a person can afford a payment of $ 1000 a month towards his house. In a normal loan he possibly could afford a $100,000 house, If he chooses the Principal only option, he could possibly go as high as a $ 150,000 house , a negative amortized loan could get him as much as a $ 200,000 house. American consumers owed a grand total of $1.9773 trillion in October 2003, according to the latest statistics on consumer credit from the Federal Reserve. ...
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