Some Michigan residents struggle with debt. Whether it involves overspending with credit cards, paying off mortgages or repaying student loans, owing money can impact every area of your life.
Your credit can suffer
When you are in a long-term debt cycle, it can make it difficult to make regular payments. This can cause your credit score and reputation to take a nosedive. As your credit declines, you may not qualify for a new credit card or a loan. You might consider applying for a new card to transfer your balances from an old card on which you owe, but that may not be possible.
Higher interest rates
If you do end up qualifying for new credit or a loan while carrying hefty mortgage debt or any other debt, you can expect to be responsible for higher interest rates. Because of your debt and the fact that you might have to borrow to pay it off, this makes you a poor risk in the eyes of lenders. To protect themselves, they require higher interest rates.
Carrying long-term debt means you’re more likely to receive calls from collection agencies. Your creditors want to be repaid, so if you owe, they turn to such entities to collect that debt.
Mental and physical health can suffer
Dealing with long-term debt is highly stressful. It can lead to mental health issues like depression, anxiety, and physical health problems. You might experience sleep problems like insomnia because you’re constantly worrying about how you’ll repay your debt. Not sleeping enough can lower your immune system and make it easier to get sick.
Debt is always frustrating, but when it’s long-term, it’s even worse. Fortunately, you have options, such as bankruptcy, to relieve your burden.