The Subtle Sacrifices of Debt-Free Living

By • Oct 10th, 2012 • Category: Debt

Debt-free living: It sounds like the dream, especially in today’s economic climate where hundreds of thousands of people, households, countries even are in more debt than they can manage. But without some debt could we be prohibiting our chances at a better life? With education loans leading to better paid jobs, mortgages equaling security and those little loans that may just help out in the short term does a strict no-debt life ultimately mean making sacrifices?

Owning Debt To Get a Loan

A credit rating is one of the most mind-boggling ways to assess a person’s suitability for a loan, this is because most loan companies require the borrower to have debt already in order to qualify. It’s a way of assessing whether a person has the ability to manage their debt, making them less risky. It could simply be in the form of a credit card used very occasionally and paid off in full regularly, this way if a loan is ever necessary it’s possible.

Loans Leading To Assets

179416400 1473652f68 The Subtle Sacrifices of Debt Free LivingIn the case of a mortgage it may not be preferable even if the buyer has the money, to purchase a property out-right. Lenders often offer very good repayment plans which allow borrowers to pay the house off gradually and at a low fee. Without this it may be that the buyer has no money left over to make improvements to the property, which will ultimately make them a profit in the long run. There is also the buy to let option, whereby a buyer will take out a mortgage and then simply let out the property, safe in the knowledge that his/her tenants are paying off the loan for him/her.

With a car loan, those living without debt may choose to keep a car until its run into the ground, but surely lending money and repaying at a low fee may just result in a better motor which can then be sold on or part exchanged before it’s knackered.

Education Loans

These are some of the cheapest loans available to anyone wishing to further their career prospects with study. Sure in some industries it won’t be necessary to get into debt for a qualification, and experience can be just as valuable for some, but coming out of University on average $19,000 in debt shouldn’t be seen as scary when the average monthly repayments are so low. If the degree or masters helps boost employment opportunities then it’s a no-brainer.

Switching Debt

For those wanting to live debt-free credit cards may be seen as the devil, but if used wisely, as in the case of 0% balance transfer cards, it may work out beneficial to own one. A credit often comes with an initial period of 0% interest, whether that be on spending or balance transfers, so if when coming to the end of that period the lender is still in debt, taking out a 0% balance transfer card and transferring the debt onto the new card means saving the additional fees, just remember to cut up the old card.

Debt is always a scary prospect and stigmas surrounding it mean a lot of people try to outwardly avoid it, but the sacrifices made to stay debt-free such as never owning property, staying in a lower paid job or not finding employment and not being able to get debt if it really is needed may not be worth the fight.

Author Bio: Geoffery specialises in the money lending market and enjoys visiting sites like Wonga ( in his spare time for short term and payday loans inspiration.   

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