Debt is a fact of life for many people, but there may be more profound effects from it than you realize.
From growing student debt to mortgages, many rely on borrowing to achieve milestones. Paying it off as quickly as possible is the ideal outcome. But being burdened by it can impact your quality of life and even catch you off guard.
Read on to learn some facts about debt that may surprise you…
- You Could Be Paying Thousands in Interest
It’s easy to put purchases on credit cards and pay the minimum balance. Also, you might not be thinking about how much of your car or home payment is the cost of borrowing.
However, research shows that if you have a student loan, a single credit card, a car payment, and a mortgage, you’re paying more than $8,000 a year in interest alone. Considering the median income in the U.S. is around $63,000, that’s a good portion of annual earnings already accounted for.
- Medical Debt Causes Health Issues
Constantly worrying about your debt can actually impact your health. It can lead to higher blood pressure in relatively young people. And it has also been linked to mental health issues such as anxiety and depression.
There’s another dark side when it comes to health. Having a high debt load may deter people from visiting the doctor in the first place, even if they’re ill or need a dental checkup. It’s the leading reason why people are prematurely cashing in on investments to cover their bills.
- Your Partner May Be Hiding It
Not many people talk about their debt load on a first date. However, it can be months or even years before partners reveal how much debt they’re actually in.
The truth is that many couples hide debt, which is a form of financial infidelity. That could mean taking out a loan and not mentioning it to a partner. In fact, more than 40 percent of Americans admit covering up debts and spending habits.
Getting electronic statements is making it easier to hide overdue bills because nothing will typically show up in the mail.
- Carrying Debt Hurts Chances of Borrowing
If you’re carrying a high debt load, then you might not qualify for a mortgage for your first home. Debt has a negative impact on your credit score, which can deter a bank from advancing you the cash you need for major purchases.
Although interest rates are relatively low in recent times, the standards for qualifying for a loan have become tighter. If you have faced recent employment obstacles, your credit card provider may have slashed your available credit.
This debt resolution guide can help you work towards a debt-free lifestyle.
- Debt Often Outstrips Savings
Putting away money for the future is important for a pleasant retirement. However, more than half of the people in the country actually carry more debt than what’s in their savings accounts.
While some older Americans may not be burdened with credit card debt, research shows about a quarter of them also have no savings to fall back on.
Learn The Facts About Debt
The facts about debt are not pretty: Americans are paying thousands in interest annually, and their health and relationships could be suffering as a result.
What’s more is that many Americans have more debt than savings, even those approaching retirement. Working on reducing debt can help you breathe easier, while helping you qualify for major purchases like a home.
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