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Loans | Freedom or Trap ?
Posted by justisrar • 5/28/09 • Subscribe to this Discussion [RSS] • Report This Topic
Topics: home loans, loan articles, loan tips, loans, loans info, mortgage loans, Payday Loans, personal loan
Share your experiences, tips, advices about the loans you have ever borrowed and let the masses know about the so called "Benefits" and the Hidden Tricks by Loan companies.
For further details on every type of Loan, Tips, Advices, Experts and Resources feel free to visit my blog:
loan-experts.blogspot.com
User Comments
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ooooooh TRAP TRAP TRAP...
Come here little mousie said the cheese. -
TRAPPPPPPPPPPP! I'm am now debt and credit free, and proud of it. I pay in cash and have a pre-paid credit card. -
I am o fthe frame of mind at this moment where cash is king, and if you can't afford it out of pocket, and you can't save for it, then you ought not have it or don't need it, with few exceptions.
In my opinion, the worst type of loan one can use is a revolving loan in the form of credit cards. They do little more than give the user some credit history, and can help your credit score, but the terms and conditions are far too arbitrary, and the open ended nature of both the loan amount, and the repayment aspect gets a lot of people into too much trouble. If one is to use a credit card, my advice would be to have only one or two cards, and only use them if you can pay the balance in full every month.
A small personal loan is sometimes necessary, and a much better approach to borrowing. For one thing, you have some definite boundaries - your percentage rate is (or should be) fixed, allowing you to know exactly how much you need to budget each month for your payment, and you have a finite amount of time to pay it back. You won't charge yourself into oblivion, and consistent repayment of a secured loan of this type does wonders for your credit score. However, you still need to be smart about it, and make sure you check the terms and conditions for any possible surprises down the road.
Mortgages are almost a necessity if you want to own a home - sitting down with an unbiased professional is the best way to make sure you are not getting in over your head. Fixed rates are best (no balloon payments!) and be sure to limit or completely restrict your desire to borrow against your home. If you can save up even one extra mortgage payment every year, do so, and apply it directly to principle. It will cut down your mortgage rate a great deal, and save yourself some money.
Which leads me to repayments of loans. If you can afford more than the minimum every month, have it applied directly to principle. When you reduce your principle, you reduce your interest, and save yourself money in the long run. But be weary of loans with penalties for early pay off - you should never be penalized for responsible financial decisions such as paying off a debt earlier than planned. A lending institution should not punish or fault a customer for wanting to limit their amount of debt, and wanting to reduce payments and/or the end amount by applying payments directly to principle, or paying the loan off early. -
I'd rather be flat on my back in the gutter than get a loan from a bank. In fact I have been.-
have you ever borrowed the loan ?
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No. The lifestyle I've chosen requires very little money to sustain and enjoy.
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In a debt based money system, loans have the capacity to "enslave" us (to the grind at least). With the coming inflationnary swell, it might not be a bad idea to take out a fixed rate loan (if and only if you are sure you can pay the interest).
bloomberg.com/apps/news?pid=20601087&sid=aIeLg1djbBps&refer=home -
TRAP! ...DUH! -
I know everyone keeps calling loans a trap - but they can be useful, if you're smart about it. The problem is that societal norms right now dictates wants and desires over common fiscal sense - so people do fall for traps because it's just too easy. I'm not excluding, of course, the unethical practices of many lending institutions.
Sometimes they can come in handy, and benefit you in the long run - but only if you play it safe, have some patience, use your common sense, and control yourself. I personally don't use loans or other lines of credit, but then again I don't currently have any need to.-
Then there's the sort of loan one gets in order to be educated for a career field that was being shipped to India before you finished school--a loan that cannot be excused through bankruptcy, mind you. I better stop, I'm getting riled up now
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I hear you on that one
Although I have found that the student loans that I got are very understanding of the current situation, and work with you instead of against you. (Granted, you have to be proactive, but still - I borrowed the money, I have to repay it).
I think it's OK to borrow for a good reason (even if it doesn't turn out as planned) or if you really need to.
I also think that some serious changes need to be made to the lending industry to make the whole thing less complicated, and our societal environments needs to change in order to quell the need to borrow money to purchase things we don't need which causes us to live way beyond our means, thus creating wage slaves. -
@Anok 2nd comment:
Much of that is frankly choice. I can see some need to change values though.
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This really doesn't take rocket science. Trap,there are only 2 things u should finance,house and a car. I still don't understand why people pay 4 food w/ their credit cards! For the life of me I don't understand why u would finance a pizza!!........( I DO UNDERSTAND EMERGENCIES THO)-
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WHy on Earth would you finance a car?! It's not an investment, and you wind up paying far more than you will ever get out of it. Particularly if you finance it rather than pay for it outright.
And about paying for food on credit cards - many people use their credit cards to purchase everyday (already budgeted) items or even monthly bills with credit cards because they already have the money set aside to pay the bill in full - so it helps them maintain their credit, without going into debt for things they don't need, and it allows them to use the credit industry to make money.
For example:
A friend of mine schedules all of his monthly bills to be paid by his credit card. Every month he pays the bill in full. Why? He earns cash back rewards by using the cards, so every time he uses the card, he gets so many cents per dollar spent that he can cash out at the end of the year. Furthermore, his real money can continue sitting in his bank account for another 30 days, accruing interest that stays in his account. plus, it ensures that all of his bills are paid on time, every month, gauranteeing a good credit score, and total avoidance of any late fees. I think the first year he did that, he wound up with an extra $200 in cash back savings, plus whatever interest he earned.
That's using credit wisely. -
U are still paying int. On something that u should not be paying int on.if u pay off ur whole balance on your card every month then you're not building credit @ all. Now about the car I don't know about you but if u want something dependable u don't buy something that is gonna needs to be worked on all the time. U buy something w/ extended warranty and has low milage, which I know I don't have 8 or 9 g's just laying around
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You don't pay interest if you pay off your card every month, and your payment every month goes towards good credit scores.
Paying 9G's for a used car is the worst investment you can make (it ouwld be OK for a brand new car). Why on Earth would you do that? You might as well toss your $9k plus the extra $3k in interest right out the window.
Waste, waste, waste. Specially since they won't actually fix anything on the car while it' s under warranty. they just wait until the warranty is up, and then tell you that everything needs to be fixed. you're better off buying an older car that's easier to fix, easier to maintain, cheaper, and not a waste of your money. -
I didn't say brand new car. We just got 2006 grand pre 4 8,000. Had 30,000 miles.bought bumper to bumper warranty for 1st 2 years and limeted warranty for nxt 100,000 miles. Finaced it for 3 yrs. It's called not taking no for an answer. Or getting up and movin on to the next place
Like I said, if u pay off the balance of ur card every month,ur not building any credit. So u don't by food on a credit card unless ur willing to finance a pizza. Still sounds silly to me to finance food,clothing,rent,etc..... if u wanna finance anything it should be a house or car. Have u ever watched suzie??? -
And by the time you're done, you'll have paid an additional $2k into it in interest (it's compounded!) and your car won't be worth the paper of the title unless you can sell it privately.
You might get $2k on a trade in, though.
This is one business I know about well - and unless you're buying something that retains it's value (Harley's, Indians, or high end cars, classics, etc) then it is a scam, a waste of your money. No matter how good the deal is.
The dealership just made $6k on the front end, and $2k on the back end, for a car they allowed as a trade for maybe $2k, and a guaranteed sale.
LOLLOL.
You know how much I paid for my car? Nothing. it runs perfectly well, needs an oil change. My husband also paid nothing for his car. I paid $1000 for my classic car that I am restoring, which is an investment with a return. And I have another car sitting around waiting to be parted out - for which we also paid nothing. $0.
No way in hell would I ever finance a car
Then again, if it weren't for the ID theft, my credit score would be in the upper 700's low 800's. Because I know how to use the credit industry. -
M'k anok my maiden name is worley. Go to google and google that name in the memphis,tn area. I have 2 mg's and a model t that are sitting in my garage right now! U are not talking to someone who is oblivious. I know I'm lookin' for an alternator right now for the jimmy j. Gonna cost about 600$ if I can't fig out how to rebuild the old one. I know little bit bout a little bit.
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Hey - it's your money - if you want to waste it that's your choice. A lot of people do.
Not me, though!
By the way, I googled your name. What was I supposed to find? I didn't see anything but various facebook profiles for Holly Worley's from around the US. I also tried the alternate spelling. Equally nothing. -
I didn't say holly worley I said worley. I have a lot of fam members in the car,fabrication, engineering,and AMERICAN steele,business. I picked up my first blow torch @ age 6. Like I said I know a little bit about a little bit.
I also know how not to waste or blow money,bc I have family with some moolah,but have never borrowed 1 red cent! -
Yeah, I didn't see anything about your family, either. The only Worleys I saw was one singer, and one doctor who died (It was an obit)
the rest was advertising for tech companies in other countries.
Again, not fer nuthin,I don't know what you using a blow torch has to do with knowing how to manage finances or how car dealerships work. If you know how to fix cars, why would you buy cars that you can't fix? That makes no sense at all. -
Like I said, lokking for an altenator that cost 600$. I want a car that is dependable to drive. Picking up a blo torch has nothing to do w/ finances. Never said it did. I said I know a little bit about fabrication. I also learned u don't finance food from the same people who taught me about fab,mech. Engineering,and ther also taught me,how to never take no 4 an answer.
Now u can throw all the bs and big words in my face if ya want to. It still doesn't change the fact that I know what I'm talkin' bout. U don't. Anyone that charges pizza to their cc is financing pizza hut. Imo that's not spending $$$ wisely -
I'd rather pay $600 for an alternator than wind up paying $10k for a car that won't run by the time it's paid off, and will cost you $1000 + for a tranny, a new radiator, O2 sensors, Speed gauges, and all the other computer parts that will take computers to diagnose, and professionals to fix at hundreds of dollars an hour. The moment that car is paid off, so too is the warranty. you've got three years. And since you know about cars, you know that nothing major will break until you get closer to the 100k mile mark.
And getting a few extra hundred dollars at the end of the year by purchasing small goods on a credit card and paying it off monthly to avoid fees is SMART financing. That's the way a credit card should be used. you make it work for you. Using it to buy stuff you'd buy anyway - things you have to buy or pay for is even smarter - because you're living within your budget, and making money with money you're otherwise just...spending.
but, since you think you know best... *rolls eyes* -
Um yea, and parts to rebuild the engine,install an ac,.oh yea don't 4get how to fab some kind of roof. Never seen a model t with one of those,but hey cheaper to buy the girls rain coats,right? You know everything. *rolls eyes 2x's*,,,,,
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LMAO, hilarious!
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I am $100,000 in debt. Why? I got an education in the United States. I did not buy a yacht, a flat panel TV, throw a huge beer bash or go on vacation. I got an education. Then I found there were no jobs to pay the loans. Luckily I scrape up just enough to avoid bankruptcy as a consultant.
Private debt--in the US at least--really amounts to private tyranny. We all need to buy important things (education, health care, etc.) and there is never enough cash for them. So we take out loans under the worst possible terms then spend our lives paying 4 times the original amount in interest. Fair deal? I think not--our Framers said that debt was the cousin of slavery. After living with creditors, I tend to agree. I often write about debt because it touches on two other major issues in our society: Fairness and equality. Sadly, we see that, when it comes to debt, fairness and equality rarely play a role.
Feel free to check out my archives on this subject:
reasoncommercejustice.blogspot.com/search/label/Debt-
Ain't that the truth!!! I have a cuz who has went to a privat outta state university for 3 in a half years. Never graduated, although she did learn how to play dixie cups properly,and how 2 take a body shot the right way,oh and the most important how 2 do a keg stand w/out throwing up! All of that cost her 50 g's and I learned all of the same stuff @ 19 for free! Yet in my family she is looked @ somehow a little better. Even tho we are both housewives,and she and her hubby still depend on mommy and daddy to pay the carnote,buy pampers,and a lot of other stuff 2
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Neither. It's how you use it. If you choose to take on debt for silly things or overspending then of course you have ensnared yourself, but if you use debt to buy a house and your sum payments (loan + property tax) are less then the rent on an inferior place in the city, you've made a good call.
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Yeah, but I think compound interest has to go. It causes artificial inflation, in my book.
you buy a $100k property, pay a minimum of $220k back (provided you didn't borrow against it) that means you have to sell the house for more than double the original asking price. Even if it's only been a few years, and wages are not capable of supporting that kind of mortgage.
That's just insanity. -
There is no minimum like that. If you paid it off in one year (unrealistic I know, but still), it would be more like 104,000 back. And some inflation is neccesary for new production to be created.
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Not if they have an early payoff penalty. (And yes paying it off in one year is highly unrealistic as is two years, or ten years unless you adopt a rich, dying uncle or something)
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Really? That is bad. I wonder how realistic regulating that is.
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What, adopting a rich, dying uncle? I think it's harder to do than one might imagine...
Your post has given me thought for blog fodder tonight. Something about how credit industries need to catch up to the current times, and why our system is too archiac to benefit us anymore. -
the inflationary effect goes a bit farther. Artificially increasing the semand for goods and services by artificially increasing the supply of "money"--The "paper money" that Andrew Jackson warned us about in his Farewell Address.
As Adam Smith put it, banking should be held to "strict rule and method" -
Lenders THRIVE on compound interest! Just to give you an idea of how bad it really is, I started out in 2006 owing $95,000 in student loans. Three years later, I have made my payments every month, and now I owe $110,000. I could not afford to pay anything but the minimum, and that gave them a chance to tack on all the accrued interest from the capital. It is just nuts, and there is nothing I can do about it. Of course, the free marketeers will say "It was an informed decision" on my part, but as I remember it, I just needed cash to stay in school, and if I didn't sign, I was out. It didn't matter I got great grades; school costs money.
I don't foresee any government regulation in this area. Here's a little something I have learned over the years: "The Bank always wins." That, in turn, is consistent with the golden rule: "He with the gold rules." Consider the fact that student loan debt is LEGALLY IMMUNE from bankruptcy discharge and you begin to see how badly the chips are stacked. Debtors don't stand a chance at this casino. -
Agit8r:
But what about industrial loans? Those expand production and increase the supply of money. The "strict rule and method" is something that America has subscribed to since the 1920's, but the problem has always been the old question, "and which rules will those be?" It's not enough to scribble 30 arbitrary regulations on a napkin and suddenly you've got a working banking system.
Anok: Honestly, I think the word "regulating" makes it pretty clear I'm not talking about rich dying uncles. -
Oester - why is your student loan using compound interest? It shouldn't be.
Agit - yeah, true true.
Jeremy, I was pullin' your leg
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@jj
In Adam Smith's day corporations were governed according to the terms of their Royal or parlimentary charters. In the U.S. charters are held by states, and had actual authority to govern them, prior to a bit of judicial activism in the case of Dartmouth College v. Woodward -
Agit - do you have some kind of photographic or superhero memory or osmething? How do you recall all of this stuff?!
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wikipedia mostly
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Agit8r: I don't think going back to the time of Dickens is good economic policy.
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This is a little bit of something I learned about in a class through Habitat for Humanity myhabitathome.blogspot.com/2009/02/my-habitat-home-what-to-do-with-our.html This was advice from a lawyer who gained nothing from the advice. -
I've only taken out student loans, and if I could do it all again, I would have just used them to start my business!-
nice planning man - there are many companies out there who offer business loans as well more info: loan-experts.blogspot.com
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lol, I know about business loans. It's much easier to get a student loan, but I chose to waste it on pointless things and binge drinking.
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Life itself is a big loan taken from God....Repayment is very hefty.... where is the scope for more loans...??..Take more at your own risks...
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wrong sp
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