Debt nowadays is considered as a normal part of life. With all the companies that offer ways to pay for what you want, it is now very easy to be in debt. Debt in definition is basically something, usually money, which is owed by one party to another. By borrowing money, you can easily buy what you need and what you want. This could just as easily put you in a rut, not knowing what to do to pay what you owe to others. When you are in this situation, check out Price Waterhouse Cooper. However, you also have to know that there are Good Debts and most people are not aware of this. Knowing the principles of good debt can assist you where to invest the money that you are borrowing.
“It takes money to make money” is an old adage that is true, especially with life nowadays. Not everyone has enough money to start building what they want and there are microfinance agencies that can help you. Being in “good debt” should not leave you worse than you were before being in debt. This should help you to be in a better financial situation. Here are examples of good debt.
- Student Loan
Student loans help more people to pay for college and graduate. This is considered a good way to invest the money you would borrow because more jobs are offered to graduates than non-graduates. Better jobs and better opportunities are offered, giving graduates more options and ways to pay off their student loans.
- Real Estate and Mortgage
Mortgages and real estate loans are good investments because these allow you to have your own home to live in, or a land in your name. These can also be financial assets once the loans are paid off, as the value of houses and lands grow in time. Paying for your mortgage monthly is also cheaper than paying for a house you are just renting and would likely not be yours in the future.
- Business investments
Starting your own business is a tricky investment. Starting with a good, sensible and realistic business plan would ensure that your business would be successful. Borrowing money to start your own business is a good debt when you ensure that all your plans would succeed. The money you would loan to start and develop your business would be very beneficial to make all your plans successful.
To be good debt, start by having a clear vision of where the money will go once you borrow it. Do not stop there; make sure that you also have a plan on how to repay the debt, either as quickly as possible, or through regular and reasonable payments. Find the cheapest possible way to borrow the money you need. Always check for what would be good for you, like the term and charges, amount of money, and interest rate.
Different companies offer enticing loans and financing that would help you with what you need. These come with a lot of conditions, requirements and sometimes hidden charges. Always take a second, more in-depth look at the choices you have to make, especially when it comes to money. Many may still say that a good debt is still a debt, but only a select few can easily pay for what they buy. Take a better approach in borrowing money, knowing where to invest it and how to pay for it. You should control your debts, not the other way around.
Micro finance is a term that refers to different financial services. The target groups of these financial services are usually people who have lower incomes. Thus, these people don’t have the opportunity to access to the variety of other financial services. Different services that have been offered by micro finance institutions are usually smaller monetary amounts. These products include insurances, loans, savings and fund transfer.
Those who promote micro finance and its services claim that the main goal of these financial services is to offer to the poor the access to a variety of quality financial services and in order to help them get out of poverty. They also believe that this is a sustainable means of economic development through the support of small business.
Micro credit is one of the main services of micro finance. This is the provision of loan services that is offered to poor people as well as people with lower incomes.
People meet these needs usually using a variety of different products provided by micro lending finance network. The others use the financial services such as savings and insurances in cases when they want to safe their money for the future or for the old age or to simply have the protection against risk.
Micro-entrepreneurs and small-business usually use loans to overcome financial obstacles while building or expanding their business. Financial services for entrepreneurs and small-business usually include: micro loans, short-term loans, capital access revolving loan, insurance and order based loans.
According to the promoters of such financial services, it is all for the sake of poor people and their main goal is to help people working their way out of poverty. But high interest rates on loans are not supporting this story.Generally, the higher the risk for micro finance institutions, the higher interest rates.
Before going into types of micro-lending networks and their characteristics I will say few words about micro-lending.
Micro-lending is also known as peer-to-peer lending and it represents lending of smaller sums of money without financial intermediary. Most of these lending are unsecured personal loans and they don’t have collateral.
Now enough about common knowledge and let us focus on why we are here. Micro-lending finance network is known as institutional network and within itself we have two networks, focal network and principal network