How to Minimize Loan Shark Tactics

Now, I’m not actually talking about getting out of some unethical loan tactics with a bunch of mafia hooligans called loan sharks, but instead talking about how to minimize those tactics that any corporation that uses unscrupulous means of keeping their customers in debt.  You will find that most corporations would love for you to stay in debt as a means of keeping profits from you high and rolling in like clockwork every month.  The worse culprits of these loan shark tactics as the time I write this are credit card companies, cash to payday loan companies, and other organizations charging a fairly high amount of interest.  I would say if you are paying anything over 6%, it may be time to look at refinance tactics or getting out of the loan as quickly as possible.

The Secret to Destroying Loans / Debt

Some of the biggest tactics to eliminating debt should be looking at maybe refinancing for a lower interest bearing credit card, getting a lower interest bearing loan if it is a long term loan or getting out of debt through debt reducing tactics.  If you have a credit card that you are paying over 5% APR, consider calling other credit card companies to see if they would negotiate giving you a card with a lower rate of interest and that rate remains fixed.  Also, make sure to get this in writing.  If you have a loan with less than attractive terms, you also want to look at maybe refinancing if the terms will be in your favor and if the penalties you would pay would be worth it in the long term of refinancing that loan.  Cash to Payday loans or scams I like to call them, should be avoided at all costs.  These are designed to keep their customers deep in debt with an abnormal high rate of interest (sometimes higher than 50%!).

Another secret that many know about yet don’t use themselves is simply paying more to the principal or the ‘meat’ of the loan.  By paying straight to principal or unscheduled payments, you can cut down significantly on the life of the loan and saving many thousands of dollars over the life of the loan.  By adopting savvy techniques, you can usually avoid heavy consequences of unscrupulous tactics of debtors.

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Category: Financial freedom, Financially Elite Blog