Debt Management

As you may have picked up in the past, I am not a big fan of predatory loans that charge 400% APY. The only companies that do this are in the infamous payday loan and check cashing industry.

I work in finance at a large company. We get leases and loans for large purchases, just like a consumer. When we sign a new lease or loan contract, they often have balloon payments, just like consumers. Part of my job is to determine whether it is a better deal for the company to lease or buy new equipment, and balloon payments are always favorable compared to loans without balloons.

If you are a fan of peer to peer lending, you might be interested in microfinance. Microfinance is a type of lending designed to help people in poor communities around the world start a small scale business that can completely change their standard of living.

Anyone who has ever had a loan has seen the statements that come updating you on your progress. Early on, it is often disheartening to see that the bulk of your payment went to just the interest, and a small amount went to the outstanding loan balance. If you ever wondered why and how it works, read on. If not, read on anyway, you could still learn something.