The Finance Blogger

This is our first post about debt and how to deal with debt. We will be covering all types of situations that people find themselves in and how they may be able to deal with it – Debt, Credit cards, loans, mortgages. In addition we will take situations, all fictional, of people who are looking for various kinds of loans and mortgages and describe how they can approach their situation, improve it and find the funds they need to manage their debt. We hope that all of this information will be helpful to readers. We plan to issue a post twice or more a month so stay tuned for more posts on this important subject that affects everyone in the country.

Debt comes in many forms, so we will provide a shortlist here:

• Mortgage on your home
• Car loan
• Personal Loans
• Credit card debt
• Private loans
• Bills that have not been paid on time

These are broad categories and over the next few months we will add posts about the various categories of mortgages for example. There are many, such as 1st mortgage, 2nd and 3rd mortgages, mortgage refinancing, high ration mortgages, bad credit mortgages, and on and on. Once things you will find that many of these are really just marketing terms that help people fit them into specific situations that they need to deal with.

Debt – Credit cards, loans, mortgages

For example, some people will need a second mortgage in addition to their first mortgage to finance something they want to do. Instead of refinancing their existing mortgage which is another alternative, they will sometimes add a 2nd mortgage on to their home for a variety of reasons.

Personal loans are the same with many different types of personal loans to choose from.

Fundamentally, whether you are talking about a loan or a mortgage or even credit card debt, they call come with an interest rate, a monthly payment, and a term that indicates when you will have fully repaid the debt that you have. Here are a couple of definitions:

Interest rate – rate of interest that you will pay on the debt that you have. Loans and mortgages are usually under 10%, while credit cards can be more than 20%

Principle – this is the amount of the debt that you wish to borrow e.g. $1000 for a personal loan.

Term – the length of time, usually in years that you will take to repay the loan. Payments are scheduled on a monthly basis. Loans typically are a maximum of 5 years, while mortgages typically are 15, 20, 25, and 30 years long.

Monthly Payment – this is the amount you agree to pay every month towards repayment of your debt, whether it is a personal loan, mortgage or credit card debt.

Extra Options

Some loans and mortgages have all kinds of extra options which we will not deal with here. Before you sign, always investigate what these options are, how much they will cost, and what the advantages are for each. Once you sign on the dotted line it is usually too late to make any changes without it costing you more money.

Well that is it for our first post, watch for new posts every other week or sometimes more often if we are in the writing mood. Comments and questions are welcome. We will try to answer them all.

For more posts about what to do about debt and what to do about it, click here.

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