Debt And The Financial Advisor In Myrtle Beach South Carolina
A common reason why many families are not able to meet all of their financial goals is due to debt. Many of these families don't understand how damaging debt can be. Even supposedly good debt such as home mortgages and student loans can be too high. That is why the financial advisor in Myrtle Beach South Carolina will often have to spend time reviewing the debt of the client during a session. Fortunately, the financial advisor can help clients reduce their debts and achieve their financial goals. First of all, it is important for the financial advisor in Myrtle Beach South Carolina to know about the details of each client's debt situation. The best way to get a list of all debts is for the client to pull a credit report. A free credit report can be pulled by clients at least once per year. The credit report should list nearly all debts that are owed. The credit report will also list the minimum monthly payment of each debt. That information will be very helpful in determining how severe the client's debt problem is. If the client of the financial advisor in Myrtle Beach South Carolina is carry credit card balances over from month to month, it is important to try to get the client to reduce credit card debt. The interest rate on credit card debt can be very high. As a result, each minimum monthly payment may only reduce the principal balance by a small amount. That is why it is important to reduce spending on credit card while increasing the repayment amount. If there is a lot of debt, it may be worthwhile to consider other options such as debt consolidation to a mortgage or home equity line. Bankruptcy may be another option if repaying all of the debt is not realistic. Student loan debt is a problem for many clients of the financial advisor in Myrtle Beach South Carolina. Unfortunately, the cost of higher education has risen far faster than the rate of inflation. It is no longer that unusual to see college graduates with six figure student loan balances. There are a wide variety of ways for borrowers to reduce their payments and defer their payments. For example, those on income sensitive repayment plans may be able to reduce their required monthly payments. That is when it may be worthwhile to switch the payment plan on the student loan. In many instances, consumers have too much debt because of overspending. In other words, they spend more than what they make. Consumers make up the difference by putting the balance on a high interest credit card. That is why the financial advisor will suggest budgeting to control the spending. Many people do not realize how much they spend in various categories. In some instances, it is quite easy to reduce the amount spent every month. If extra money is found from the monthly budget, that money can be used to reduce and eventually eliminate outstanding debt balances. That is why budgeting is very important. In the long run, the only debt that consumers should have is the mortgage. Ideally, the mortgage will be paid off at the time of retirement. If consumers have monthly mortgage payments upon retirement, that will significantly increase the monthly cost of retirement until the mortgage is finally paid off. That is why it is very important to eventually have a plan to pay off the mortgage. Although a mortgage may allow borrowers to repay in 30 years, it is better to pay faster than that if retirement is less than 30 years away. The financial advisor can calculate how much borrowers have to add to the monthly payment in order to shorten the time needed to payoff the mortgage. Click for more info on financial advisors in Myrtle Beach, South Carolina.
