April 20, 2018

7 Effective Steps to Get Out of Mortgages and Loans for Job Seekers


Our system has one outstanding way of holding men in place - it's called a mortgage," says Australian author and psychologist, Steve Biddulph. Young generation of today is grappled with the system of mortgages and loans. Mortgages and loans engulfs the entire life of young generation especially job seekers. These mortgages and loans come in packages such as Educational and Student loans, Car loans, Appliance loans, Payday loans, Auto Loans, Personal Loans and Home loans. This post tell you 7 effective steps to get out of mortgages and loans for job seekers.

Generation Information

What is a Loan?

A loan is a debt provided by an organization or individual to another entity at an interest rate, and evidenced by a promissory note which specifies, among other things, the principal amount of money borrowed, the interest rate the lender is charging, and date of repayment. Source: Wikipedia

Types of Loans: Conventional Loans, Conforming Loans, Non-Conforming Loans, Secured Loans, Unsecured Loans, Open-ended Loans, Close-ended Loans. Source: Debt

What is a Mortgage?

A mortgage is a debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments. Source: Investopedia.

Young Generation Can Get Out of Mortgages and Loans

Who is a job seeker?

A person who is searching for job and currently unemployed. I have written a post on Miracle mantra for job seekers to get desired job immediately that describes there is no miracle mantra to get a job but hard work and experience.

How Job Seekers is Trapped in Mortgages and Loans?

"When you go for that vital interview at the bank you walk out with a a hundred thousand dollars*. It's a miracle, but something else happens, something they don't tell you about. You leave a testicle behind!

"The bank manager keeps it in a jar in his safe, along with all the others! If ever in your life you get the urge to do something risky, exciting, different or adventurous, chances are you will not because you don't have the balls to do it!"

The system of mortgages and loans are systematically planned to trap the lower income class and middle income class individuals and young people till the end of their lives. I guess everyone remember about the bankruptcy lead to global depression. Bank systems and private parties squeeze the good part of lives of youngsters and keep sending them reminders of loan and mortgage payments.

I know a friend whose father took a home loan in 2003 from a bank for $100000. They have paid EMI 15 yrs and paid a total of $200000 which is twice the initial amount. The left over amount was $75000 They were totally shocked. This was basically because of floating interest rate which they did not knew. The rate of interest was 7% when they took the loan and after 15 years it became 14%.

7 Effective Steps to Get Out of Mortgages and Loans for Job Seekers

There are couple of methods that everyone should follow to get out of mortgages and loans. I will share a couple of them here. 

1. Knowledge of Loans and Mortgages that you have taken

Learn as much as about loan rates: Prime lending rate, effective interest rate, types of rates: Floating or fixed, take full account statement often, understand if there are penalties or extra charges levied by the bank, check amortization schedule, learn about converting the loan to base rate or mclr rate conversion. 

Lack of knowledge about your loans and mortgages will blind you from effectively reducing risk and banks may cheat you systematically. Previous case study will show you how exactly bank cheated them with floating rate interest. A retirement calculator will give you approximately how much money you should invest every month to save for retirement life. An EMI calculator will help you to adjust your EMI accordingly to reduce duration.

2. Get Unemployment benefits

Try to get unemployment benefits from Government. This will help you to manage current situation and get tax benefits.

3. Talk to a Debt Counselling or Debt management firm

Debt management team can help you figure out how to plan your EMIs and how to get out loans and mortgages fast. 

4. Increase EMI amount and Pay the Loan or Mortgage Fast

Debt is debt however you call it. Bank will get more money from you if you keep on paying a small amount of EMI. At the end of the closing period, I can assure you that you will be at lose and Bank will gain. The entire loan and mortgages system is planned in such a way that you have no other option than losing hard earned money. 

People may tell you about tax benefits for loans that you have. I would say do not go for it. You can get tax benefits by purchasing a health care policy, or insurance. There are many more ways to gain tax exemption other than loans and mortgages.

5. Ask Bank to Reduce Interest Rate

You can talk to the bank manager, explain your financial situation and ask for a reduction in interest rate. This is a possible method which you can try. Never go for extending the duration of loan.

6. Talk to Fee Only Financial Planners or Financially Savvy Friends and Relatives

It may be little hard for you to share your financial situation to others. But it will help for sure. You can hire a fee only financial planner to plan your debts management, investment and retirement. If your friends are financially savvy, they help you to plan and finish of debt.

7. Join FB Groups and Online Forums that Talk about Debt management

Many active forums and groups are out there in online space where you can ask questions and clarify your doubts about loans and mortgages. Join them and be an active member. This will help you in figuring out what exactly you should do to get out of loans and mortgages.

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