Do not be afraid of debt. If you plan well, you will win.
No one wants to be in debt. But sometimes it may be necessary to spend more money than accumulated savings such as buying a home for living. Pay medical bills Business investment Pay for tuition, buy cars, etc. If you have good planning and discipline to follow the plan. Debt settlement will benefit self and family. Conversely, lack of good planning and lack of financial discipline. The probability of financial insolvency and prosecution is high. And here is a simple technique. To make a good debt.
1. Understand yourself if you need debt to improve your quality of life. Must distinguish what is needed. Anything is not needed If it does not, it will become the start of over-spending. Make a loan over basic necessities too.
2. Understand your repayment potential. Do not just start debt until you are confident. For example, if you buy a high property such as a home, the car must try to make a savings of approximately 30-40% of the purchase price. And when calculating the total return should not exceed 40% of net income per month. But if the ratio is increased, it is not wrong. Depending on the potential and discipline of each person.
If you have good planning and discipline to follow the plan. Debt settlement will benefit self and family. Conversely, lack of good planning and lack of financial discipline. The probability of financial insolvency and prosecution is high.
3. Credit is difficult but easy to destroy. Must try to make credit acceptable to creditors or financial institutions from the date of not planning debt. Whether dealing regularly with financial institutions, saving money or investing. Accounting, receipts, expenses, etc. If the debt does not pass, do not blame credit bureau or other people. Try to explore yourself before you create enough good credit.
4. Choose the right type of loan. Credit products must be selected to suit the actual purpose and suit the repayment period. And should choose debt to make income or debt necessary for living, such as housing debt. Debt for education Medical expenses Business debts, especially those who do business, should not use short-term debt to invest in the long run. Because if the event does not return the expected results will affect the ability to repay immediately.
5. Debt comes with interest and responsibility for repayment of principal. Debt must be able to pay principal and interest with real income. At present, should not expect future income is not too far. Because if the plan is wrong, the debt will exceed immediately.
6. Create repayment discipline to meet the period. Or pay off the debt quickly. Help build your credit to financial institutions. This will continue to do good if you need to add more debt in the future.
7. Create emergency savings. In the event of an unexpected event such as an accident or sudden illness, you will have enough reserves to repay your plan while you are in adjustment.
8. Understand all the principles and strictly follow.