What Millennials Should Know About Debt
Riding on the coattails of Generation X and the Baby Boomers, Millennials are almost guaranteed to start off their adult life with a chunk of debt. Student credit cards and student loans make up the majority of these debts which places Millennials in the constant debt cycle experienced by the generations before them. Dependent 23-year olds can expect an increase of $10,000 in state-cohort debt per graduate. Although this seems to paint debt as evil, does it mean all debt is evil? Discover a few debt products that make a positive difference to this generation.
Flexible Mortgages Options to Benefit the Client
Traditional finance structures that act as a ball and chain will simply not fly with this forward-thinking generation. With mortgages, millennials are encouraged to seek out products that meet their needs. With previous generations, the lender had the upper hand and the borrower had to adapt their needs to suit the product. Consumers are recommended to shop around and find a product that will not only provide them flexible terms and conditions but also allow them to make the most of the finance period. This includes the ability to pay in additional amounts and even settle the finance without penalties.
Personal Loan Products That Meet Individual Needs
Gone are the days where consumers are lumbered with scores of tiny little repayments that seem to have no end as the interest never really allows consumers to pay off the capital. A personal loan has the ability to swallow up all those repayments in a singular repayment, although it could mean paying off the debt takes a little longer. This form of finance is also easy to apply for as can be seen by this Finnish example. It’s convenient and simple, both qualities that millennials look for in their financial products.
Car Loans That Make Sense
One of the products that tend to baffle both millennials and financial gurus such Suze Orman is the hire purchase option. This option allows consumers to have a new vehicle every three years and seems like a great choice, but it doesn’t really afford consumers the opportunity to be debt free. At the end of the term, consumers have the option to pay in a lump sum should they wish to take over ownership of the car but very few individuals actually have the money. According to Suze, those who can’t afford to purchase a car with cash should rather look for a finance option that allows them to repay the car over a period of 36 months.
It’s not always possible to steer clear of debt all the time, especially when unforeseen events occur. In this case, it’s important to know which options provide the best value over time and won’t cause further financial problems. The assistance of a professional such as a financial advisor might also be a good idea.
