Debt is an investment!

I know what your thinking. This guy must have smoked his breakfast this morning. Debt is an investment to your banker if it is your personal debt. When you take out a loan, you have given your lender an investment, your interest. You have two choices. Pay it off super fast so the lender doesn’t make a whole lot off of you or lower your interest rate if you think it’s going to take awhile to pay off. If you plan on consolidating on one payment, be sure to cut up and cancel all your credit cards. The last thing that you want to do is reload your credit card. You will be in big trouble financially if you reload after consolidation loan. If you get a consolidation loan, the debt did not magically disappear. You just lowered the amount of return “interest” that your banker will make on his investment, your debt. I think the best way to eliminate your bankers investment is to throw tons of cash at the smallest debt and use that payment to eliminate the next lowest debt on your creditor list. Work like a crazy person working 50-60hrs a week. Think of it like this, if you had a CD in the bank. The banker would focus on eliminating his debt, your interest earned to you, by lending your money into a loan. Now he has a cash flow that covers your interest and then some. The leftover is profit. All he did was move money. He can’t make money unless he has interest income from the debt.

Your banker owns your car!

“Consider this: Your bank is expecting to get $15,500, and you give them a car worth $5,000. If it were you, wouldn’t you want the other $10,500, too? So will the bank. In fact, they may not even want the car in the first place: Banks are in the business of lending money, not selling used cars.

I can’t say exactly how (within the law, of course) your bank would go about trying to collect their money, but five figures gives them quite a bit of motivation to get what they can instead of just writing it off. I wouldn’t expect them to go away quickly.” –  ask the lawyer@Dear esq

I totally agree with this article.  Try taking your brand new car back to the bank.  Your banker will go, sir where’s the rest of my cash I lend you?  Your best bet would be to borrow the difference and put that on a unsecure loan so you can get out of the loan.  At least now your not making that outrageous car payment that is going to put you in the poorhouse.

Digg it!


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