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Why Lenders love your salary
Providers of
debt love salaries because it gives them a dependable source of income. It is the equivalent of taking out a fixed
interest investment at huge interest rates.
Companies
compete for what is known as your ‘disposable income’, the bit of your salary
that is left over after tax has been deducted.
The pitfalls
of debt are associated with the ‘repayment mindset’, where borrowers take as
much money as they are able to repay, instead of calculating their solvency to
determine how much is best to borrow.
The repayment
mindset leads to unnecessary interest and charges that could be saved or put
towards purchasing.
This quickly
leads to insolvency, when the household income can no longer cover the
repayments.
Insolvency
practitioners can arrange with creditors to repay only as much as the household
can afford, or to ‘cancel’ the interest and only repay the amount borrowed.
This will
however damage one’s credit rating, causing other creditors to react and making
it more difficult to raise new and better finance.
It is
advisable to seek help long before your salary becomes overburdened with
repayments. The heavier the burden on
you salary becomes, the more difficult it will become to move away from
insolvency.
Cheap
Credit Is Too Good To Be True
Together We Owe
Over £1 Trillion
Debt Can Make Goods More Expensive To Buy
Lending Is Not Properly Regulated
The Threat Of
Insolvency Is Very Real
There Is No Such
Thing As Free Credit
You Can and
Should Use Debt To Make Money