Having a Financial Freedom Plan

July 31st, 2007 | Stacey | Debt Management, Financial Independence, Financial Freedom Opportunities, Financial Freedom

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With struggling for money to pay constantly increasing basic bills and trying to keep credit cards at bay, it can seem difficult to form a financial freedom plan. However, when you are trying to attain financial freedom, it is imperative to steer clear of predatory lenders in the process.

What are predatory lenders? Basically, they take advantage of low income folks trying to get out of a temporary hole by charging outrageous interest rates. During a dire crisis, a predatory loan may become your only options. However, most circumstances are not that urgent and you should carefully consider the resources you use to try to become financially free.

Predatory lenders can be:

-Payday lenders set up in transient storefronts to loan folk money until the next payday. If the money is essential to fix your car and get to work, it serves a necessary purpose. On the other hand, those concert tickets that will be sold out by pay day are not a good enough reason to pay over 400 percent interest on a loan. Payday lenders frequently charge from 400 to 475 percent in annual interest charges and cater to young, low-income women, according to estimates taken by the Consumer Federation of America in Washington.

-In the old days, pawn shops were places to find overpriced second hand stuff and sell your second hand stuff. Now these stores have been replaced with high interest online credit shops that feature merchandise at extremely inflated prices and charge outrageous interest on the purchases.

There are several other types of predatory lenders to be aware of, which we will discuss further in tomorrow’s blog.

Remember, to achieve financial freedom you need to make solid decisions about both money and credit. A financial freedom plan should never put you further in hock.