Ways to come out of Bad Debt
Bad debt is the service or product sold on credit. There are cases when one can expect to get the money back. There are cases where the money can never be realized.
Some of the significant causes of Bad debt are-
When the equation of income and expenses is not balanced, it leads to bad debt.
Failing to save enough from whatever one earns could be another cause.
Managing the money poorly is another major reason of bad debt.
There are ways to come out of Bad debt.
Some of these have been mentioned below-
There are quite a lot of companies in Canada which help to negotiate with the debtors. They make them calculate the loan and interest as well. They also negotiate with the total amount too.
A Person who has to pay debt should remember to pay the loan on time. There are many cases when people don’t pay their loan due to negligence and not much due to fund problems. Ultimately the debt gets accumulated and becomes difficult to pay back.
One can opt for debt consolidation loan. This enables to clear off different loans at different interest rates and pay them in one go. In turn, one has to pay a single loan with a cheaper interest rate. This also saves a person from being harassed by a lot of creditors. Instead of handling them a number of them one has to handle a single person or organization.
Tax free savings account can be started. One can save up to $5,000 in a year. This substantial amount can help one to save a huge amount and clear the bad debt.
Guaranteed Investment Certificates, an and indirect way to save oneself from bad debt. This kind of a certificate or investment helps in creating an emergency fund. An interest rate of 12% is available on such investments.
The loan approval and the lending companies are available in a number more than required. The loan approval process too takes only a few hours. There are online companies not even asking for any rigid document. Hence people seem to be depending upon these loans for any small or big requirement.
The rising prices and changing lifestyle makes a person lured to a loan. Easy availability of loan makes things easier for people but keeps on adding to the loan till the time it becomes a bad debt.