Debt. This is an inevitable part of life’s financial aspect. A person with credit card immediately becomes in debt the moment he or she swipes the card for a purchase. This is only one great example of a debt, but what about the others? Cash loans, IOU’s , auto loans and payday loans. Name it and for sure there will be someone out there who has that kind of debt obligation. It’s not a bad thing to be in debt. What can be quite difficult is when it becomes out of proportion. When the debt is more than your income or what you’re capable of paying.
In trying to settle the debt, you have the option to consolidate everything and apply for a cash loan or some would call it refinancing. This will give you the chance to have the money you need to pay everything and focus on settling the cash loan afterwards. On the flip side, you can also slowly pay your debts using your pay, or the money from your source of income. This is probably the easiest way and what everybody is most likely doing. Just like anything else, there are pros and cons when you settle cash loans on your own. Let’s have a look.
- You can pay the debts according to your income and lessen the effect it can cause to your budget.
- Not having to apply for a refinancing or cash loan through your bank.
- You can use your credit card and other source of income such as but not limited to; incentives, bonuses; appraisals.
On the contrary, there are also disadvantages when you try to settle your cash loans on your own.
- Not being able to meet the due date of your loan.
- Slow paced improvement or progress in paying off the debt.
- If you apply for a cash loan and mess it up, your credit rating will be affected.
- Interest that can be higher than the principal loan which you might incur if you apply for a cash loan to use in paying your debts.
Given the pros and cons, you have to look at your current financial situation. Set a goal, when do you want the loans paid off? What will be your advantage if you get to pay it on time and at a shorter period? After deciding, take action and start paying off. For whatever way, the main goal is to get rid of the debts and be stress free.