Borrowing money when you need may be a feasible option but you must make sure that it is repaid on time. No matter where you borrow the money, the consequences are more or less similar if you do not repay it back as desired by the lender.

If you borrow it from your friend, colleague or family relative it may affect your relationship with the due to non-payment.

Borrowing it from banks and other credit unions or financial institutions has even more severe consequence involving legal actions. Add to it they will also add penal charges that will increase the original loan amount adding on to your woes. You will also have to answer collection calls which are annoying and embarrassing as well.

In both the instances, you have a common effect and that is you lose borrowing power, in the future no matter how badly you need money.

Easy Lending Policy Enhances Your Borrowing Power

Limiting Your Freedom

Financial Debt may limit your freedom to spend your money. Moreover, as all debts are meant to be paid back, you will have issues in making arrangements for repayment when you have restricted freedom.

• The limiting force will negatively affect and even restrict your ability to pay if you are deeper into the debt hole.
• Your eventual financial destiny will be in jeopardy and most surprisingly you will not even notice it until it grows into a major concern.

Therefore, you must be wise enough to take proactive measures early so that you can make the repayments on time and keep down the debt to manageable limits.

It Limits Your Career Choice

The benefits of liberty lending can turn sour with improper debt management. When you have larger debt against your name, it may even limit your choice of career. You will not be able to select a job that you desire or make a change. You will have to stick to your current employment reluctantly till the time you can clear your debt.

You will not be able to leave your current job and start a business that you think is better and more productive than your current job. You are not in a position to venture into unknown territories due to your financial status even if you have the capability in you.

In short, you will have to stick to whatever is available to you knowing that it is good enough to pay up your bills.

Limits Your Generosity

At heart, you may be a very generous person. You may love charitable jobs, want to make religious contributions and even feed the poor but for your debts, you cannot do that currently.

You have to be frugal with your expenses so that you have enough money in hand to meet your monthly bills and postpone your socially generous intentions till the time you are clear of debts. A bulk of your income will be required to pay off the monthly bills tying up your hands.

You will need to focus more on the preventive measures than religious works so that the debt or debts do not cross your manageable limits. If you need to work more, you will have to find more time and other alternative options to make arrangements for money.

It Affects The Future 

Debts will also affect your future financial status. If you have too much debt, then you will not be able to reduce your workload or even retire in due time. You will have to overwork if you do not manage your debts well, especially the long-term loans that always seems to be never-ending.

• Over time you will have to maintain a low profile and lifestyle and curtail all luxuries sticking only to the bare necessities.
• You will not have a reasonably fair amount as your retirement fund even at the age of sixty.
• All these can be avoided if only you have a proper plan for your debts right from acquiring to its repayment on time.

Health And Relationship

An unmanageable debt will also take a toll on your health. Not only you will have to worry about making an arrangement for funds to pay back your loans, but there will also be a nagging and constant tension of collection calls, loss of sleep and fear and anxiety. All these will show its effects on your health.

Having limited resources, you may even have to forego or postpone your regular healthcare which will add to your woes of unmanageable debt. There are several health problems related to debt apart from unreasonable and frequent mood swipes that will affect your family relationships.

Quantum Of Debt To Carry

Easy availability of loans does not mean you will go overboard and borrow more than you cannot afford to pay back. This is not the actual meaning of liberty lending as all loans are given out to get it back along with interest which is the profit of the lenders. Therefore, you must always know the quantum of loan you can carry effectively so that you can make your payments without worrying too much.

Judge your comfort level by balancing your monthly payments and income, assets and liabilities. You must make sure that the current amount of debt you are carrying does not lead to a larger debt when you think of consolidating it into one.

Maintain A Spreadsheet

Always stay connected with your debt management plans. Take a closer look at the amount outstanding and the amount that you have currently and can arrange for the rest of it. The best way to stay in the loop is to maintain a spreadsheet that will contain all the necessary information, data and statistics. This will enable you to have feasible and effective logistics to make further plans for debt payments more effectively and proactively.

Include all necessary elements in the spreadsheet such as the amount outstanding and the dates of payments of each. Also, enter the corresponding rate of interest of each, the amount already paid and how much you have to pay more.

Such immaculate planning will assure financial health and control over your life as well.

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