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Importance of Paying Off Debt

  • Date Submitted: 06/18/2016 11:56 AM
  • Flesch-Kincaid Score: 81.8 
  • Words: 400
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Why is it important to pay your loans off?
- When you get your loan paid off it will give you more extra money to spend on things you want.   Getting your loans paid off may also help elevate some of the household stress by getting the debt off your shoulders. It will also be a stress reliever to have one less bill to have to take care of every month. Once your loan is paid off you will notice a higher credit score than what you had before the loan was paid off. Once your debt is paid of you also then fully own whatever product the loan was for.

2) What are the benefits of paying your loan off sooner than later?
- The sooner your loan is paid off the more money you will be able to put towards other things. Whether it’s a new car or just a bigger savings account. Paying off debt early will also help to decrease your debt to income ratio. Paying your loan off early will also help raise your credit score and credit health.

3) What are the consequences of not paying your loan back?
-If you don’t pay your loan back, your credit score will be destroyed which may cause you to have to file for bankruptcy. You will experience difficulty when you try to get a loan in the future. You may not be able to get approved to get a new car, or a home loan, or even rent an apartment. The lender can also garnish you federal and state tax refund until the loan is paid back in full. They also have the choice of garnishing your wages from your employer until the loan is paid back. If your lender chooses to they can also take legal action against you for not paying back the money you owe.

4) How can you pay back your loans?
-The first step is to know who your lender is, who much you owe, what your payment is, and where to pay this bill. You also need to find a payment plan that works for you. If you don’t choose a payment plan you will get the standard 10-year payback plan. Another thing to look into is loan forgiveness. If you serve in a public service position such as...

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