How much debt is too much debt?

[TOZZIBLINKZ]

A words debts , money , and loan are interrelated to each other . That is to say for a loan to be made money must be involved , and forget to be incurred by a person he or she must have initially received a loan from another person .
So with this scenario this trade talks about debt , and much of debt is considered as too much . Before accepting a loan from a person or from a financial institution it is important for you to first of all consider ways to pay back if the means why you need the loan doesn't turn out to be positive or profitable .

Business owners , managers and employers tends to sort out financial assistant and help from borrowing from banks and other financial institutions , some even go as far as to borrow not from 1 bank but from more than one banks , in situation like this when it is time to repair the loan being borrowed such companies might cut corners thereby seeking to repay a particular bank before paying another , this indeed is considered as too much depth which is absolutely bad in the life of a business whose vision is to make profit .

 

[Good-Guy]

There are many people who take loans and they have debts. Taking loans is something that is quite common in the business world and many people have debt. However, usually the problem happens when people take an excessive amount of loans and when they end up in bad debts. Bad debt is a condition when the business or an individual person takes too much loan and suffers from a huge loss. As a result of that, the person or the business organization ends up failing to pay back the loan to the lender and when such kind of situation happens, the business or the businessman becomes bankrupt.

I do not think that there is any single definition of how much loan is too much loan because the amount of "excessive loans" vary from one person to another. A rich businessman could borrow too much loan and it might not be too much for him. A small business might borrow a small amount of money and that small amount might be too much for that small business. So the actual meaning and definition of too much debt varies form one business to another. In short, if a business borrows an amount of money that it cannot pay, then such kind of debt is too much debt.

 

[Kingsley]

I don't support people who love accessing loans some even do access loans, just because a fellow colleague in their work place or business centers told them they were accessing loans. They do this believing they will pay it back with their salary, but in the end they discover that they can not cover the repayment and hence the interest on the loans become so alarming.

Some just feel their business can not just do without accessing loans, hence they go all out accessing loans from various microfinance bank and at the end they misuse these loans and get seriously indebted. And he same business they were trying to maintain will eventually be shut down.

There are other people who think the omly way to start a business is by accessing loans, although it is true that the economy of my country is very terrible as there are no support financial for people who intends to start off a new business and even existing businesses finds it very difficult to support themselves. But i wouldn't encourage others to go into loans because it might make them become bankrupt. Loans become too much when it looks like a bad debt or irrevocably debt.

 

[Caramelle]

Financial leverage can be a great technique for acquiring the needed funds for business expansion or capital spending. Many companies resort to loans in order to achieve rapid growth. Some business opportunities require quick decision-making and capitalization that may not be readily available. Business owners and top management may resort to third-party funds when their own funds are tied up somewhere and they are quite positive that the returns of the project will exceed the cost of its capital or investment. In such cases, loans can be advantageous when used properly and effectively.

However, when a business starts accessing loans to fund its operations, that could be a red flag for the company's ability to sustain itself. A business that has been operating for some time is expected to generate sufficient revenue to support its activities and bring profits to its owners. When it has to borrow funds for its working capital or day-to-day expenditures, it is obviously not performing well and probably not even producing enough to reach its breakeven point. Obtaining more loans will merely compound its problems and delay the inevitable. At the first hint of financial difficulties, the management should have addressed the issues and actively implement measures to improve its sales and cut back on operating costs.​

 

[Abigael]

Before taking a loan, it is best for sure to first assess your ability to pay it back. You should check within your income if you actually have enough money you pay back the loan. If you don't, then the loan you will be taking is just too much. You better look for another way to earn the money you need.

Another thing that shows that the debt is too much is when you have to borrow some where else in order to pay back the loan. Most people become aware later on that the loan was just out of their capacity when it is too late. So they choose to borrow somewhere else to pay it back, hence forming a continuous cycle of debt.

Sometimes you may choose to give collateral as an alternative to when you don't pay back the loan. But when the collateral is not the same price as the loan then your application may be rejected. Which shows that you are taking on a debt that is too much.

 

[sincerem]

For me, I would say debt which you can't control or afford to repay as at when due shouldn't be considered, that's the one which is too much for an individual to handle. Yes, I take loans from my local bank but I don't take more than I can't afford to repay. And when the interest rate becomes too much I simply stay off. I will only go for loan whose interest rate isn't much. I am happy I've taken care of all my debts especially the one I am owning the bank. Meaning, I am not burdened anymore concerning loan debts or debts from another source.

To be frank, I never enjoyed taking loans, if not for emergencies I wouldn't even enter into such kind of thing. It is easier to take loans but very hard to pay back. Lots of people are simply suffering it today due to excessive pending loan debts. And as such, the interest is increasing because it has crossed the deadline, that's simply weird to enter it. It causes restlessness to the affected one. That's why it isn't advisable to enter into loan we can't afford to clear when it is due to avoid issues.

 

[Sotherefore]

A debt is always too much when you are not able to pay it back and because of this we are always advised to avoid it at all costs , it is not always the best way of starting some business.

For me personally I cannot just be so comfortable when I understand I still have a lot of loan to pay in my life that is why I always try as much as possible to avoid anything that has to do with loan because I value my peace of mind and I consider it to be the most important thing for me.

If I don't really have the money to start up any business or engage in anything profitable I would rather wait to raise the needed money to start up the business perfectly than to do it with the loan except I have an external source of paying back the loan which is the best because this won't affect the new business you are establishing

What I'm trying to say is that you should not be looking for an opportunity to accommodate so much loan in your life because that is not just the best option, it can sometimes leads to mental stress .

 

[Sotherefore]

A debt is always too much when you are not able to pay it back and because of this we are always advised to avoid it at all costs , it is not always the best way of starting some business.

For me personally I cannot just be so comfortable when I understand I still have a lot of loan to pay in my life that is why I always try as much as possible to avoid anything that has to do with loan because I value my peace of mind and I consider it to be the most important thing for me.

If I don't really have the money to start up any business or engage in anything profitable I would rather wait to raise the needed money to start up the business perfectly than to do it with the loan except I have an external source of paying back the loan which is the best because this won't affect the new business you are establishing

What I'm trying to say is that you should not be looking for an opportunity to accommodate so much loan in your life because that is not just the best option, it can sometimes leads to mental stress .