Do you think that the debts are to be avoided at all costs? Perhaps you are in debt and dreaming you no longer have debt? Myself, I’m very happy to have absolutely no debt today. Financial independence is a goal, but some debts can be useful. A debt is not inherently bad.

Only assets that increase in value. Financed by a loan your home, a home that you rent, the studies that will increase your salary , the creation of your business, are examples of good debt. You could probably not buy these goods without credit and they’ll bring back more than the cost of credit. Often much more.
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You just touch a premium, or at least a certain amount, and you hesitate to use it. Is it better to invest it, make it fruitful for you closer to your goals? Or is it better to pay off your loans early, to get out of your debt faster? The simple answer would be to compare the returns of these “investments”. -Is that the rate of your credit is higher than the expected rate of return for your investment? But it would forget to take into account all your risk.

Three options. Normally you have three options to consider. You spend the money to please you, in which case you lose money. You invest the money in the long term and hope for a gain of 10%. You repay your debt on your credit card at 16.9%. Whatever the numbers, the fact is that this is not to know what is the best performance, because the answer is quickly seen.
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This is the crisis and economic activity decreases. Many people lose their jobs or see their incomes melt away like snow in the sun. How to cope if you have debts to repay? A reader asked me over this issue today by mail. I think many readers would be interested in my response to this article which can lead to a discussion with other opinions. I’m not in this situation today but I also know that an outsider can easily take a step back from such a situation. And if these financial difficulties accounted for just the right opportunity to become richer?

1. The psychological aspect

I know it’s cash you need. But come to think of five minutes, you will understand that the way you look and see things changes everything. I know people who find it normal to be short every month. Personally, if I do not have my money ready precaution in case of need, it becomes my number one priority. As if I were at risk financially. A few years ago I finished, like many, the month with my bank account close to zero. Your approach to things changes your priorities and therefore your bottom line.
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The situation is not simple. Here’s how, a priori, I will attack the problem, in order:

1. Spend less than you earn. The first thing to realize, in my view, is not to create new leaks before thinking of money to plug the existing ones. It does no good to pay your debts if it is to create new ones. You can start by canceling your credit cards, to be sure not to fall again. But the only way to pay off debt, as to become rich is to spend less than you earn. This requires that you know how much you need to live each month. Can you reduce as much as possible each budget item. You will then know how much you have left each month to pay your debts and put money aside for the unexpected.
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This is a taboo topic oh! They say it is easier to talk about sex than about money. Yet it is part of our daily lives and is inevitable in our personal and professional development. Maybe do you ask for a raise. Or you have to negotiate a new contract? Sometimes more difficult, you are self employed and you must justify the provision of services for which you bid.

In all situations, you must avoid at all costs to enter a negotiation dangerous. As soon as you touch the money, the quarrel and susceptibility are not very far! It often reflects the money supply by the value that there is agreement or of the value that others have of us … is not it? That is why, when sees a financial discussion on the horizon, it must be solidly prepared.
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Currently many ads can be seen in the media offering reunite all debts and reduce total cost of such financing.

This practice of reunification is not new. Banks, thrifts and credit unions has always been at risk of default or problems announced by its debtors to meet their compliance obligations, provide alternatives for customers to modify the payment terms agreed upon and overcome a difficulty supervening to meeting their various payments.
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Personal secured loans are usually allocated to the purchase of consumer goods and services: a car, a computer, furnish the house, go on vacation, studying abroad.

No amounts are usually higher.

The customer is liable for the fulfillment of its obligations (repayment of loan and interest payments and bank fees) with all its assets, present and future. It is therefore normal that before taking the loan the credit institution to examine its ability to pay, requesting proof of income (salaries, rents …), rental inventory of its assets or an affidavit of their heritage.
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Among the personal loans, there is a category that has a special regulation: the so-called consumer credit regulated by the Law 7 / 1995 of March 23, Consumer Credit .

This Act applies to contracts where a natural or legal person in the exercise of its business, profession or trade, (a businessman), grants or promises to grant credit to a consumer in the form of deferred payment, loan, credit or equivalent means of financing to meet individual needs regardless of their business or professional activity and the amount is between 150 and 20,000 euros.
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Leasing: operations are usually offered by credit institutions in which the entity transfers to the client during a predetermined period the use of movable or immovable property you have purchased expressly for this purpose, in exchange for the customer to pay certain fees monthly (part of which is corresponding to the amortization of the asset transferred and the other financial costs). The leasing contract will necessarily include a purchase option, to an end, to the client whose amount is determined from the formalization of the contract and, if the client is exercised by paying the amount will obtain ownership of the property.
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In this variety of loans, the interest rate remains constant throughout the life of the contract, and therefore you know from the beginning the total amount of interest you have to pay. That’s the big difference between floating rate loans: no uncertainty about future assessments.
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