Debt Consolidation: Must for all after 45 years of age
Borrowing is not a sin. However, borrowing too much can
invite trouble. It is better to consolidate debt, to ensure that the retirement
dreams do not suffer.
“Too many people spend money they haven't earned, to buy
things they don't want, to impress people they don't like.”----Will Rogers
Gone are those days when our grandparents and parents taught us not to stay in debt and pay off our loans as soon as possible. The philosophy of life back then used to be "Being debt-free is living free.” Now there are new concepts of bad debt and good debt; people do not think twice before taking more exposure to credit. In a way it is good that all of us are experienced on how credit-worthiness goes. But though it is an established fact that all of us will, sometime or the other, get ourselves under debt, but not many are sure as to when to opt out of it and how.
“Are you really living life or are you just paying bills until you die?”----Author unknown.
Are you feeling the same about your debts as stated above? Then it is time for you to read on.
'Debt consolidation' is a key aspect in your professional life and it should be done at least 5 years ahead of your retirement. The earlier is good, but not before an age when you are unsure whether you need to borrow more. Intermittent debt consolidation is good for those who like to borrow endlessly though.
We borrow endlessly when our desire to own things supersedes our actual requirement. We start with our own education loan, then credit card, personal loan, car loan, home loan, mortgage loan, business loan, EMI-s on purchases made on credit cards, loan from friends and relatives, loan against shares, loan for travelling the world, gold loan, loan for getting children married, for sending them for foreign education and by the time we are 55, we have already lost control of the loans and the debts remain.
By the time you have crossed 40, you have already started thinking how life is going to be after retirement. When you touch 45, your desire to be free from debt increases many-fold without knowing what to do with your credit cards and mortgage. You of course have many credit cards and high possibility that you have more than one home loan too!
“A budget is telling your money where to go, instead of wondering where it went.”----Dave Ramsay
Obviously, you never thought of making a budget for yourself when you were in a borrowing spree at a younger age, but it's time now at 45 to stop wandering and fix the issue.
Step:1 Make a list of all debts you have in the following charted way-
Gone are those days when our grandparents and parents taught us not to stay in debt and pay off our loans as soon as possible. The philosophy of life back then used to be "Being debt-free is living free.” Now there are new concepts of bad debt and good debt; people do not think twice before taking more exposure to credit. In a way it is good that all of us are experienced on how credit-worthiness goes. But though it is an established fact that all of us will, sometime or the other, get ourselves under debt, but not many are sure as to when to opt out of it and how.
“Are you really living life or are you just paying bills until you die?”----Author unknown.
Are you feeling the same about your debts as stated above? Then it is time for you to read on.
'Debt consolidation' is a key aspect in your professional life and it should be done at least 5 years ahead of your retirement. The earlier is good, but not before an age when you are unsure whether you need to borrow more. Intermittent debt consolidation is good for those who like to borrow endlessly though.
We borrow endlessly when our desire to own things supersedes our actual requirement. We start with our own education loan, then credit card, personal loan, car loan, home loan, mortgage loan, business loan, EMI-s on purchases made on credit cards, loan from friends and relatives, loan against shares, loan for travelling the world, gold loan, loan for getting children married, for sending them for foreign education and by the time we are 55, we have already lost control of the loans and the debts remain.
By the time you have crossed 40, you have already started thinking how life is going to be after retirement. When you touch 45, your desire to be free from debt increases many-fold without knowing what to do with your credit cards and mortgage. You of course have many credit cards and high possibility that you have more than one home loan too!
“A budget is telling your money where to go, instead of wondering where it went.”----Dave Ramsay
Obviously, you never thought of making a budget for yourself when you were in a borrowing spree at a younger age, but it's time now at 45 to stop wandering and fix the issue.
Step:1 Make a list of all debts you have in the following charted way-
1 Principal outstanding amount,
2 Unexpired tenure
3 Monthly payment dues, and
4 Rate of interest
Step:2 Choose the lowest rate of interest product which gives you the longest tenure,
2 Unexpired tenure
3 Monthly payment dues, and
4 Rate of interest
Step:2 Choose the lowest rate of interest product which gives you the longest tenure,
Most likely, it will be your home loan or mortgage
and see if you can get more loan against that property at the low rate.
Step:3 With the extended borrowing amount, start closing down with the highest rated loan.
Step:3 With the extended borrowing amount, start closing down with the highest rated loan.
Please note that it should not be the highest
EMI-bearing loan, as we all tend to stop that first. The highest rate bearings
are the ones which is eroding your retirement funds.
Unfortunately, the concept of debt consolidation loan has not yet picked up in India. That means no such product is available unlike it is available abroad where lower rate-bearing loans are available to help people close down their high-rate bad loans. Here in India, we seek personal loan to close credit cards and loan against property to close personal loans. There are however, small companies who help you with money through investors who give you the loans at a lower interest cost than what you are already paying. However, the professionalism on those unstructured lenders are not known clearly.
Take an expert's help while doing debt-consolidation as many aspects are to be weighed before you choose how to raise the extra fund for consolidation purpose and in which order to foreclose your various debts.
Unfortunately, the concept of debt consolidation loan has not yet picked up in India. That means no such product is available unlike it is available abroad where lower rate-bearing loans are available to help people close down their high-rate bad loans. Here in India, we seek personal loan to close credit cards and loan against property to close personal loans. There are however, small companies who help you with money through investors who give you the loans at a lower interest cost than what you are already paying. However, the professionalism on those unstructured lenders are not known clearly.
Take an expert's help while doing debt-consolidation as many aspects are to be weighed before you choose how to raise the extra fund for consolidation purpose and in which order to foreclose your various debts.
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