Dumbarton, Scotland United Kingdom (PressExposure) November 29, 2007 -- Daily Dosh is proud to announce the launch of a new financial blog dedicated to bringing consumers everything they need when dealing with debt. Because everyone is different, the "correct" amount of debt we should all have will vary. However there are some good guidelines you can follow.
Of course, lending companies will give you as much finance as they think you'll be able to pay back. Although they are taking a risk, they are also very careful to make calculated risks. They look to see how often you have defaulted on a loan, current interest rates along with your credit history. If you are looking to borrow money then it's wise to understand their strategy.
Always think hard about taking out any credit and make sure you can actually make the repayments. Don't go ahead with any loan if you know you will default or file for bankruptcy. It's simply is not worth it, no matter how much you may think it will be just now.
If you are expecting an increase in income then you can certainly factor this into your decision. However make absolutely sure before signing any contracts.
Keep an eye out for interest rate trends. This might sound difficult however general trends are not that random. Bonds, futures and other indicators can also help. If you see 6% bond option prices going down then it may be that interest rates will rise. This is what professionals look at when working out future interest rates.
Keep a check on your credit history. If you were a bank would you loan yourself an amount of money. It doesn't matter if you had a cold which is why you paid a debt late. Banks only care about hard facts.
Take into consideration your complete income and expenses making sure you are realistic. You might desperately want that shiny new car but seriously, can you afford to pay $400 a month and still be able to keep up the mortgage repayments? It's important you are completely honest with yourself.
No member of staff can tell you if you really want or need that item you've had your eye on. Think about if you would rather wait whilst you save for the money rather than paying high interest rates.
Impulse is one of the biggest culprits of debt. Before rushing out and buying what ever it is you want, think to yourself "do I really need this debt?"