Certified Financial Planners and the Most Common Accumulated Debts
Debt can be a major financial burden for individuals and families, and it can also have a negative impact on credit scores and overall financial health. Debt can accumulate for a variety of reasons, including overspending, unexpected expenses, job loss, or student loan bills. When debts are liable to rise due to interest build-up and mismanagement from the debt carrier, sometimes acquiring the assistance of certified financial planners is a necessary step to reduce debts. But before that decision becomes a necessity, some may wonder what the most common debts are.
Find out some of the most common types of accumulated debt and offer tips for managing and reducing debt.
Credit Card Debt
Credit card debt is one of the most common types of debt that people accumulate. This type of debt is particularly concerning because it often comes with high-interest rates, which can make it difficult to pay off. Credit card debt can accumulate quickly if individuals use their credit cards for everyday expenses or large purchases that they cannot pay off in full.
One way to manage credit card debt is to make a budget and prioritize paying off high-interest debt first. Individuals can also consider transferring their balances to a credit card with a lower interest rate or consolidating their debts into a single loan with a lower interest rate with the help of certified financial planners.
Student Loan Debt
Student loan debt is one of the most regular forms of debt in North America. Student debt can be especially hard for young students to be grappled with because it often comes with long repayment terms and high-interest rates. Many individuals struggle to make their student loan payments and may feel overwhelmed by the amount of debt that they have garnered over such a span of time.
Luckily, managing your student loan debt is possible if you begin to explore repayment options such as income-driven repayment plans or loan forgiveness programs. Individuals can also consider refinancing their student loans to lower their interest rates and make their payments more manageable.
Medical debt is another type of debt that many people have garnered over time, although this debt is primarily applicable to citizens in the United States of America rather than Canada, which has federally funded healthcare. Medical debt is often a hardship because it often comes with unexpected expenses and may not be covered by insurance. Individuals who have high medical bills may struggle to pay them off and may be at risk of falling behind on other bills.
Those with high amounts of medical debt can negotiate with healthcare providers for lower bills or payment plans. Individuals can also consider seeking assistance from non-profit organizations or government programs that provide financial assistance for medical expenses.
Mortgage debt is often accumulated when individuals are pursuing the purchase of a home. This type of debt is a challenge to alleviate because it often comes with a large monthly payment and may have a long repayment term.
Mortgage debt can be manageable if you seek out refinancing options to lower interest rates and monthly payments. Individuals can also consider making extra payments toward their mortgage to pay off their debt more quickly.
Auto Loan Debt
Auto loan debt is something that can be easily garnered by those who have taken out loans to purchase a vehicle. This type of debt can be difficult to fully pay off because it often comes with high-interest rates and may have a long repayment term. Individuals who fall behind on their auto loan payments may be at risk of having their vehicle repossessed.
Auto loan debts don’t have to be completely overwhelming, as you can seek out lower interest rates and monthly payments. Individuals can also consider selling their vehicle and purchasing a less expensive car to reduce their debt.
CTA: Playcheques is Alberta’s solution to astute and efficient financial planning. With our team of professionals who are eager to advise our clients with educated and helpful advice, we strive to be the best financial planners in Calgary! For more information about our financial planner’s services at PlayCheques Financial Solutions, visit our website at https://www.playcheques.com, or call us at 403 837 9344!