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Debt Management


While studying Economics, we at times say debt is good. But Debt is good only when an economy is concerned. The central bank can print fiat money with governmental decree. This is at times good for an economy in the sense that pareto optimality is yet to be achieved and the economy can thus progress without hurting anyone in it. It is good for the people who want to invest in government bonds and earn an income from it later. As long as the debt remains, the bonds circulate hand from the older population, who dis-save, to the younger population who now want to save.

For the common man, debt is not so great a thing to carry. And that is why the question of debt management arises. The Debt Management System has come in to being with many companies, mainly credit counseling agencies, trying to help debtors manage their debts. However, a debt management program may not include all your debts. You have to keep track of these.

The Debt Management program generally manages the insecure loans like loans on a credit card or personal loans. Secured loans as mortgages and car loans do not fall under the purview of debt management policies. So, those bills that are not paid by the debt management program should be kept in mind and be repaid as and when they had been agreed upon.

You should make sure that your creditors get the money you repay back, on time. This is because, if the payment reaches late, you will be fined with late repayment charges. Before choosing a Debt Management policy, verify whether the time it repays loans matches your repayment cycle. If it does not, either changes the debt management agency or notifies your creditor and check if you can change your repayment cycle.

Keep a tab on your loan and credit card statements. If the statement from your debt management agency does not match the concessions or lower rates of interest that your creditor promised you, try to resolve the mismatch as soon as possible.

The credit report should be checked at least once each year. Make sure that the report is updated. If you continue paying back the loan regularly, you should soon find a major improvement in your credit report.

To avoid getting in to debt, try avoiding taking loans while you are in debt. Most of the creditors do not take it very well if you apply for a fresh loan while you are with a Debt Management plan. If you indeed have to get a car loan or a mortgage, go for professional advice or counseling services by the debt management plan agencies.

Finally, it is absolutely necessary that you love your money. Try cutting out on all the unnecessary expenditures and set your own budget. For this you can take the benefits from your Debt Management plan agency, the counseling sessions and the educational programs they arrange for the debtors.