Financial management may come easy for some people while proving to be a ‘burden’ for some. Sometimes, financial emergencies crop up which requires you to come up with a particular amount of money soon, but what will you do if you do not want to fall victim to loan sharks or the high interests charged by lending institutions and bank? Today, more and more people are seeing the advantages of the “social lending” platform. With social lending, the traditional process followed by banks in lending money to their clients is bypassed – which means that the financial institution’s service charges will be eliminated, and the interest rate for the amount of money borrowed will be lowered (also called P2P, peer-to-peer or person-to-person lending.)
If you are one of those who find themselves up to their necks in credit card debt, you may want to make use of the social lending platform to consolidate your debt. Debt consolidation is a way of combining all your credit card debts together by negotiating with the banks that you owe the money to. Once the debts are consolidated, instead of paying several monthly interests which may pile up in the long run – you only need to pay a fixed amount per month for all the debts that you owe. Debt consolidation is an effective way of reducing the interests of the debts that you owe.
There are basically two key elements of good financial management:
Make sure you budget and plan ahead and stick to what you can afford to repay
Seek out the best interest rates and service from your lending institution to avoid falling into a spiral of high interest rate repayments with limited flexibility
Community lending and borrowing sites are likely to feature increasingly is an approach to good personal financial management as consumer start to realize that it is possible to seek additional funding without having to deal with the big-profit oriented banks.