Uncertainty in our finances is never a good feeling to have. Really, it is difficult to imagine someone who would argue against that fact. Yet, it seems to be the pervading feature of handling personal finance that has spread across the world at an alarming rate – crossing social and economic boundaries, even.
Why is that, though, if it is pretty much the last thing that anyone wants? This might sound like a cop-out answer at first, I know, but…it is complicated. There are a lot of different socio-political elements at work here, let alone the economic factors that must be considered when we discuss a topic like this one.
Taking a look at the current state of economics on a global scale (as discussed here, https://www.imf.org/en/Publications/WEO) gives us some insights onto why uncertainty and stress seem to be the main adjectives that describe our own personal relationships with money. The collective debt held by students in the United States, for example, goes into the billions. If that is not alarming, I do not know what is!
Unfortunately, this has meant that a lot of us are in what we could call a bind, to put it nicely. Living paycheck to paycheck is hardly unusual right now. That has some serious implications for overall economic growth, since spending money is not exactly abundant. When that is the case, it is a bit difficult to have a global rebound, let alone one on a national level.
What does this have to do with loans and interest calculators, though? Well, of course, I will be explaining that in due time. For now, just know that they are all connected, and if you want to learn about how that works, consider staying to read on!
Loans and the Link to the Economy and Health
Honestly, this is not a topic that comes to mind for many of us when we hear the word “loan.” This is part of my motivation for highlighting the connection here since it is quite important even if a lot are unaware of the link. You see, levels of debt across the world have been steadily increasing since 2004.
Now, you are probably thinking that this is an arbitrary date, but prior to that, there was a fairly steady rate of borrowing money and thus owing a financial institution. These figures have been increasing since that year, though. If you were alive at that time (which most of you probably were), you may remember the ultimate consequence of the borrowing frenzy.
That is right – the ultimate culmination of that craze was the housing and stock market crash back in 2008. When that happened, more eyes started to turn towards this, resulting in some research articles being published to discuss the potential consequences that this has had on public health and overall economic stability. Unsurprisingly, the effects have been negative.
I know – it does not take a rocket scientist to figure out that having debts can add stress to a person’s life. However, it does go deeper than that. In fact, it has gotten so severe that it has permeated our very cultural identities. Nowhere is that more obvious than in the United States, honestly, when we consider all of the graduates saddled with thousands of dollars in debt for their education that was basically a necessity to get hired anywhere.
What Got us Here?
Something like this does not happen by accident, as you may already know. A lot of banks and financial institutions have policies that lean towards what is commonly dubbed “unfair lending practices.” What does that involve, though, and what does it look like?
In essence, it involves not being transparent with borrowers about interest rates and monthly repayment plans. Additionally, sometimes these repayments could take up a disproportionate amount of a borrower’s monthly income. This did impact cultural and ethnic minorities more than other groups, so that is another factor to consider here.
Now, this is where I can tie in the idea of loans and calculators for them, though. When we are looking for a potential lender, these are some things to keep in the back of our minds! Knowing what positives to look for versus what red flags might be can really work in our favor.
Offering a låne kalkulator forbrukslån tends to be a green flag, especially if you can see how much monthly payments might be when factoring in the interest rates that you qualify for. This sort of resource is valuable because it allows us to determine whether or not a loan is in our budget or not.
Be on the watch for some of the unfair practices that I mentioned above. They might seem fairly innocuous, but unfortunately, that is far from the truth. You might be surprised by how quickly a person can sink into uncontrollable debt thanks to exorbitant interest rates and defaulted payments.
So – What Else is there to Know?
Allow me to briefly sidetrack this discussion by pointing your attention to the matter of public health. I did touch upon it for a little while in the above sections, but it is honestly shocking that debt has had such a large impact on this across the world. Having large amounts of debt has even been linked to having generally poorer health.
Of course, I am obviously not saying that this is why something such as the coronavirus was able to spread across the globe so quickly. Rather, I am simply pointing to the fact that socioeconomic status absolutely had an impact on survival rates in many parts of the world. This could be a factor in that as well.
Moving on from that, though, let us turn to the question of whether using a loan calculator is a worthwhile endeavor or simply a waste of time. As you can read about in this article, you can see that there does seem to be some evidence that it can help borrowers understand what they are getting into when they borrow money.
Taking out a loan can definitely seem like a quick way to get some cash into our pockets – in particular, thanks to the flexible nature of personal loans, they can be easy to view as convenient funds. While it is an understandable view to have, I would urge you not to see them in this way. Borrowing money has significant impact on a person’s life and should never be done lightly.
Educating ourselves is one of the few ways that we can truly empower ourselves when it comes to these things. Financial institutions are rarely one hundred percent transparent about interest rates and how much you will end up owing them in the end, since that could potentially dissuade someone from going through with the deal. However, when we know what we are setting out to do and have a clear plan, the interactions between borrower and lender can be quite positive.
Hopefully, this article has helped to display that, as well as offering you some perspectives that you had not previously considered (or had a deep dive one) before. In some cases, it is disheartening but still worth researching.