Why Loan Dependency Can Be a Real Serious Problem?
The existence of loans paved the way to the betterment of society. Back then, loans are pretty straightforward; you can approach a lender and he will give you the money. You must repay the full amount of the loan, along with some interest rates. Then everyone’s happy. As the nature of loans changed over the years, society now has an imminent problem: loan dependency. At first glance, there seem to be other more potent problems. But if you look deeper, loan dependency can really be a major life issue.
Loans are Negative Debts
Debts are divided into two types – positive and negative. Loans fall under the negative side because you have to pay for them on a term basis. More importantly, failure to pay a loan will set you back. The best way to mitigate a negative debt is to get it out of your system as soon as possible. Pay off the loan, and then move on with your life.
Loans Can Control Your Life
Mismanaged loans are like clamps – they press on harder until you are no more. Loans can control your life starting from the financial standpoint. From there, the stress brought by unpaid loans can seep through the other aspects of your life. Instead of being controlled by loans, seek ways to control them. Loans are means to an end, not a way of life.
Interests Will Tear Your Finances Apart
Even if you can pay your loans regularly, interests can cause financial adjustments over time. The adjustments will cause a dent in your finances; instead of saving the extra money, it goes for interest payouts. That can be saddening or downright frustrating. Manage your loans well, and reassess your financial actions.
Loan dependency is more prevalent in poorer, urban areas. However, the rich and the middle class are also getting their hands on high-value loans lately. Loans are not generally bad, as long as you keep a vigilant eye over your borrowing habits. Also, you must repay a loan before applying for a new one.