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Topic: Loan  (Read 2433 times)

levettepough

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Loan
« on: June 09, 2014, 08:45:24 pm »
If you pay off one loan will you borrow again?

bhiett

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Re: Loan
« Reply #1 on: June 15, 2014, 01:10:04 pm »
Not quite sure what you are asking.  Large loans like for houses are probably one-time and long-term committments.  You end up paying huge amounts that go for just interest.  Smaller "loans" are things like credit card debt (and still cost a lot in interest unless you pay them off before each month's due date).  When you possibly can, it is to your benefit to pay off a loan as quickly as possible, thus letting the money that would have gone for interest stay in your own pocket.  It also is good discipline and character-building to save up for what you want to buy, although for big purchases like your first home that probably is not possible for most people; however, you should factor into your budget paying extra on the principal each month to help pay it off faster.

moon29

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Re: Loan
« Reply #2 on: June 23, 2014, 06:10:11 pm »
i personally cant wait until i have a couple of loans paid off and can recoup the extra 75 dollars i pay on them each month.  while that may not seem like a lot it is when you work from home online and only have one income.  we currently have a loan on our house as well as my husbands car ( i no longer have a car as i wasent using it and it was paid off so we sold it)  we are sticking with my husbands car for quite some time either til its paid off or nearly paid off so at least 8 yrs or more and we just moved last year to our smaller house and will be staying here for at least 8 -15 yrs which could become an issue with our expanding family but it is just not feasible to move to a bigger home again even though we will be having another child.

tfw6693

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Re: Loan
« Reply #3 on: July 04, 2014, 10:19:17 am »
 :) No, I am debt free and have no intention of borrowing money again. If I want a big ticket item, I just save up the money first.  :)

jmccaskill

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Re: Loan
« Reply #4 on: July 04, 2014, 10:32:40 am »
I think everyone should strive to be debt free. It is seemingly very difficult for many to live day to day without using credit, or so they believe so. I have been completely debt free for over 30 years now. I simply do not buy anything that I don't have the cash on hand to pay for. I was anything but wealthy when I decided to get debt free, and it was not always comfortable to not have what I wanted at the time but driving an older car, doing without cable TV, not spending money on vending machine snacks, and a lot of other small steps were not all that painful. 

heypeg

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Re: Loan
« Reply #5 on: July 04, 2014, 10:46:22 am »
It would depend what the loan was for and what a needed the new loan for. I am trying to pay off all my debt right now.

lgemini

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Re: Loan
« Reply #6 on: July 24, 2014, 03:55:43 am »
If  I need the money I will borrow again.

lvstephanie

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Re: Loan
« Reply #7 on: July 24, 2014, 10:10:45 am »
There is good debt and bad debt... The good debt are things that have low interest and potentially have increased value over the price that you paid for the item. Things like loans for education (although the interest rates on those loans are getting higher than when I took out mine because so many students are defaulting on them), houses, and cars (although their value tends to decrease with time) are considered good debt. In fact home loans are very good nowadays with their very low interest rates... Usually with small improvements, you can actually beat out the interest rate of the home loan by the increase in value. Moreover, you can write off part of the interest on home loans if you do itemized deductions on your income taxes. Additionally, you may also be able to make more on interest on investments were you to just pay the minimum on the home loan.

Bad debt are things like credit cards, small personal loans, payday / tax rebate loans (where you essentially sell the value of your future paycheck or tax rebate in return for immediate cash less a sizable chunk of interest), *bleep* loans, etc. that tend to have high interest rates. For those, it is best to pay off as much of the loan as soon as possible.

I know there are some financial experts (Dave Ramsey is probably most well-known because of his syndicated radio show) that would argue to get out of all debt asap, even to the point of not contributing to an employer-matching IRA until all of a person's debt is eliminated. Even though critics of this approach point out that this doesn't make much financial sense (as I pointed out for the home loans), he contends that it is less about the math and more about the emotions... If you have a lot of debt, you tend to feel overwhelmed, that you'll never pay it all off, and tend to give up, whereas if you are completely debt free, you feel much more in control of your money. It is the same rationale that he uses when saying to pay off your small loans first and work your way up instead of paying off loans in order of their interest rates (paying those with the highest interest rates off first) even if a smaller personal loan has a smaller interest rate than a larger credit-card loan.

For myself, I'd rather pay off the loans from a financial sense, paying a lot on high credit card loans and just paying the minimum on my home loan. If the interest rates are the same, then I'd go with the one that is smaller for that sense of accomplishment, but otherwise I'd pay it off in order of the interest. And also take into consideration other variables to determine how much I should pay off (for example, if my employer matched contributions to an IRA, I'd first pay into that IRA to get the matching money, and then pay off as much as I could on a high-interest loan). And I probably will get loans in the future, esp. if there is some promotion attached to it (eg car companies tend to have 0% interest for 60 months promotions).

hawkeye3210

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Re: Loan
« Reply #8 on: July 24, 2014, 02:57:13 pm »
Likely just a mortgage when I buy my a house. All other debt isn't worth it to me.

skrogman

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Re: Loan
« Reply #9 on: July 25, 2014, 09:07:32 pm »
I have to say yes.  I am stuck in a payday advance loan that I cannot pay off.  All I can do is play it smart and step it down a level each time the loan comes due until I can work out of the low level.  I cannot really pay it off without rolling it over and borrowing it back.  I joke all the time and say I wish I could get lucky enough to have a really hot month on online surveys to pay it off, but it hasn't happened yet.

BATISTAGIRL663

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Re: Loan
« Reply #10 on: July 26, 2014, 06:35:13 pm »
no if i get all my loans paid off i will not do it again --well i better say as long as there is not a life changing emergency or something --it is just to stressful for me

nascar048

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Re: Loan
« Reply #11 on: July 28, 2014, 08:28:28 am »
yep twice year  8)
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king4cash

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Re: Loan
« Reply #12 on: July 28, 2014, 08:50:23 pm »
Yes of course, but this time I will be more care full with the payments, and do not let the interest rate climb on me....

sarabtrayior

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Re: Loan
« Reply #13 on: September 04, 2014, 06:09:13 am »
I think we should all strive to be debt free, not easy because we always want it NOW and don't want to waid...

stretch1967

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Re: Loan
« Reply #14 on: September 07, 2014, 11:06:08 am »
Are you talking about payday  loans. That is dangerous and hard to get out if

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