When you borrow money, you enter the world of debt game. Like many other games, it has rules, player strategies, and a scoring system. Many are losing in the debt game and game over with the worst condition which bankruptcy filing is their ultimate option. If you have or are entering the world of debt game, one of the best things you can do for yourself is to learn and play the debt game well and be the winner at the time of game over and get out of the debt safely.
Rules of the Debt Game
In order to play well in the debt game, first of all you need to know the rules of this game. Here are the debt game rules:
Rule #1: What you borrow, you pay back with interest
There is no “Free Money” in the earth. The money lenders lend you their money to you and in return you need to pay back to them with the amount you borrowed plus the interest based on the contracted interest rates. Once you have signed on the dotted line of the loan offer agreement, you have committed yourself to repay that loan plus the interest as stated in the agreement.
Rule #2: If you don’t pay, you suffer
There are consequences when you don’t repay your loan. Unpleasant phone calls from creditors, urgent mail arrive at your home, and surprise visits from debt collectors hired by the lenders come to take back what you bought but didn’t pay for. In order to avoid this type of grief in your life, repay what you borrow.
Rule #3: If you pay your loan on time with interest and you are rewarded
Money lenders will like you if you pay your loan on time with interest, they think you are great and will want to borrow you even more money with a lower interest rate. With you good repayment record, they know chances are good you will pay them back.
Rule #4: Your performance in the game of debt earns you a score
One you are entering your first debt game by applying your first loan or credit card, a score system will be created for you and follow you for the rest of your life. Three primary credit agencies in the United States keep sophisticated records of each individual’s credit history, including yours. Based on your pass credit activities, a credit score will be assigned to you.
If you never miss a loan repayment and you always pay your loan on time each month, you will get a good credit score. If you have an excellent credit score, you will get better offers such as higher loan amount, lower interest rate, faster approval time when you apply for a credit. And you will have a better position to negotiate for an even better offer because many lenders like you to become their client and they willing to lower their requirement and provide you a better offer in order to get you signed up with them.
We all play the debt game because there are times we must borrow to meet challenges and take advantages of opportunities. The important thing to remember is that as long as you know the rules and play the game well and paying it off in a timely way, you are ahead of the game.