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Hca 220 Appendix G

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Week 5 Assignment: Student Loan Summary

James Amaya

Consequences of Borrowing Too Much Debt

Approximately one third of your credit score is based on how much debt you have. A lower credit score means that you will have a difficult time getting approved for certain types of loans and credit cards. Being in debt can cause illness, sleeping difficulties, and relationship problems. The consequences of ignoring too much debt could eventually lead to personal bankruptcy. Some signs of trouble are: juggling bills to cover payments, being overlimit on credit cards, making only minimum payments on credit cards, using credit cards to pay normal living expenses, having a credit card cancelled for poor payment history, being repeatedly overdrawn at your bank, and being embarrassed to discuss your finances. Any of these things can cause you to have to modify your lifestyle by: selling assets, obtaining a part-time job to pay off bills, get a debt consolidation loan, or share housing to save money. These things can be difficult but they could save you from your last option, personal bankruptcy. Bankruptcy is never a good idea because the court costs and attorney fees alone can cost $1, 000 or more. Bankruptcy stays on your credit report for ten years. Bankruptcy may also affect your ability to obtain a home mortgage or other credit.

My Plan for Repaying My Student Loans

Before even making the decision to return to school I knew I would probably need student loans to pay my tuition. About a year before I started my own debt elimination plan. I took my smallest credit card, paid it off and kept going until I am now working on number 5. I plan on having most of my debt, including two car loans, paid by the time my student loans are due. I have an agreement with my student loan provider to pay the interest and some money on the principle of my loan every month.

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