The Loans Canada team sits down with Gary Schwartz of the Canadian Lenders Association to talk about open banking.
Advantages of Paying Down Your Debt
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Debt can sometimes feel like it’s a part of our everyday lives, it’s a constant issue which makes ignoring it a lot of easier. One of the hardest parts of debt repayment is taking that the first step to get started; if you never take that first step then you never have to come face to face with your debt. Living in blissful ignorance may seem like a good idea but in reality taking the time to face your debt can and will improve your life in so many ways.
The thing about debt is that on the outside it can seem like an impenetrable issue, one that you’re doomed to be burdened with forever. If there’s one thing that we want you to understand, it’s that debt can be conquered and the sooner you start dealing with it the quicker it will be paid off the less painful it will be.
Need a bit more motivation? Here are the top reasons why it’s so important to stop ignoring your debt and face it head on.
- Financial Stability
Debt can weigh heavily on both your finances and your personal life; more often than not it will keep you from taking advantage of opportunities which could be beneficial to your future. Financial stability is something everyone wants and something that debt is very good at preventing. Wasting a majority of your income on interest and minimum payments will hinder your ability to create a financially stable future for yourself. You need to create a budget and a plan that will allow you to starting making larger payments towards your deb so that you can become debt free sooner.
- A Good Credit Score
Debt greatly affects your credit score. Too much debt means that your debt utilization ratio will increase which will in return make it more difficult for you to get approved for a loan or new credit card. Furthermore, if you are approved for a loan or new credit card you will more than likely be offered a higher interest rate and less than favourable terms. A high credit score and a credit history that proves you can responsibly manage your finances will open up countless doors for you now and in the future.
- Interest Savings
Debt accumulates interest and depending on how much debt you have, interest could be ruining your finances. Stop acquiring more debt as soon as possible and then work as hard as you can to pay off the principal of your debt. Paying off your debts means paying less interest which then means you’ll have more money in the bank to start accumulating the kind of interest you actually want.
- Your Personal Life
Debt is one of the most stressful things you’ll have to deal with in life, it can and will take a toll on your personal relationships and make you feel as though there is no end in sight. Finally feeling free of your debts and getting rid of the guilt are both great motivators so use them to your advantage and start paying down your debt now. Your future more relaxed self will thank you, trust us.
- The Future
No one knows what the future holds so heading in that direction with more debt than you can handle and no plan to pay it off is a serious problem. When you take on more debt you’re basically hoping that you’ll have enough income in the future to pay it back. This is obviously an issue as you have no idea what your income will be in the future or whether you’ll even have one. Paying down you debts now will allow you to have a brighter financial future where you income isn’t already spent on debt repayment.
Make a Plan and Start Today
We hope that you’ve decided to face your debt head on and that you’re determined to finally be debt free. If this is true then you definitely need a plan. Create a budget, make some lists and get organized and no matter what your plan is just remember that the sooner you start the sooner you’ll finally be able to say you’re debt free.
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