Debt Removal Tips

It is difficult to control debt.It can be controlled by proper planning .Credit Cards are Loans are major sources of debt.- Remind yourself that credit cards are not there for your convenience. In reality, they are very expensive loans that can quickly add up with interest rates ranging from 16% to 21%. So, avoid using them whenever possible unless you are very disciplined.Credit card loans are difficult to bear.There are many hidden charges.They do not provide any information at the time of giving loan amount.They use compound interest without any reducing loan option.


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An investor faced various kinds of risks when investing in different asset classes.The attention is focused on possibility of some sort of interest rate risk,another graver risk is often ignored .This is the credit risk;present in particular types of investments Considering the risk and taking steps to tackle it is important for every investor.

Credit Risk -This risk is present in most debt investments.The risk is that the entity issuing the debt might be unable to pay the debt amount,resulting in loss of capital to the investor.This will happen when the position of the entity issuing the debt deteriorates and it is unable to pay the required amount.First the interest payments might stop and then even repayment of capital might become tough.

Debt Instruments

There is a feature called 'credit rating'in the market,which helps an investor understand risks involved in these types of instruments.The credit rating gives an indication about the financial position of the entity.Stronger the position,the better it is for the investor.The risk here could be that over a period of time the financial position deteriorates resulting in repayment problems.

Danger Zone

Investor face various risks even in their debt investments.One of them is credit risk that increases during tough conditions.This is the risk that the entity is not able to repay the amount borrowed.This is present in most debt instruments available for investments.Investors can have either a direct or an indirect exposure.

Debt Reduction

Many people view debt reduction as a difficult and arduous process, but in reality it can simply involve a series of easy steps.

1. Stop Borrowing - Cut up your credit cards and only pay for things with cash, check or debit cards. 2. Consolidate Your Debts - Look for the lowest interest rates and consolidate all of your debt under that rate. You might be able to get a bank loan to pay off your credit cards and debt or maybe roll your credit card debts from multiple cards onto a single card offering a better rate. 3. Focus on Repayment - Put yourself in a repayment mindset instead of a spending mindset. Think of paying off your debt before making a purchase and allocate your money accordingly. Perhaps you could hold a garage sale or sell some things on eBay that you no longer need in order to raise more funds. 4. Pay Off the High Interest - It is very important to pay off your high interest debts first because they are the ones that cost you the most over the long run.