Personal debt is a problem that can be to different degrees and there is always an option to help people even in the most agonising and difficult situations. There are a number of personal debt myths that are widely known as ‘fact’ throughout our public consciousness that might not be the real truth.
This article aims to put to clear up the myths of personal debt and to show you how you can find help and to work your way out of personal debt.
Personal debt myth number 1
The first myth is that to have any debt at all attached to your name and credit score is a bad thing for your financial future. It may seem an honest truth, but you can have good debt. Over the years there have always been irresponsible lenders, with no aim but to take even more money from their customers, even if that means putting them in a worse financial position than when they came looking for help in the first place.
Personal debt myth number 2
Another fact is that you are ok to keep paying the minimum repayment on your debt. Whether this is a loan or a credit card it is often the easiest approach for many to keep the debt coming down by paying the minimum expected payment each month. This only exacerbates the problem, as you will end up paying much more, over a longer period of time, than if you make a concerted effort to pay a higher figure over a shorter period of time in order to pay the debt off.
Personal debt myth number 3
If you have a plan of action and know that you can pay off the debt each month, owning multiple credit cards at one time is not as irresponsible as you’ve been led to believe all your life. Being able to pay off multiple lending streams each month is, in fact, a good thing for your credit score and will help you to build it positively. Whether this is credit cards, store cards or a payday loan, repayments look good for your credit score.
Personal debt myth number 4
If you are faced with multiple debts do not panic. You may have been advised to pay off the high interest debt before tackling anything else, but in terms of being motivated to carry on paying off debt on a regular basis and in an effective manner, it is much more effective to pay off the smaller debts first. It is much better for your mind to clear debts off the slate completely as it is a motivating routine to be in. By the time you reach the larger, high-interest debts you’ll be in a routine where you are used to paying debt on a regular basis.
Clearing your personal debt won’t be easy, and it shouldn’t be. However, you should always be as fully informed as possible, looking at what you believed to have always been true and to think logically about it. This article puts to bed some personal debt myths and shows you that there are other ways to remove your debt without the panic that you might currently be experiencing.