What Are Some Future Consequences of Borrowing Too Much Debt?

Getting yourself into debt has both short-term and long-term consequences. In the immediate future, you're stuck with high payments and a potentially compromised lifestyle. These concerns can become exponentially worse if you don't nip your debt in the bud. In fact, you may find that your life is more difficult because of your debt load.

Higher Interest Payments

The most obvious long-term consequence of having too much debt is that you'll owe more money to your creditors. You'll also owe much more in interest payments than you would if you didn't have the debt. That's money that you could be saving for your future.

Lower Credit Score

Having too much debt doesn't just hurt your wallet. Your abundance of debt will be reported to the credit bureaus. An increased debt load with a stagnant salary can lead to an increase in your debt-to-income ratio. As this number increases, your credit score decreases because it indicates that you're unable to meet your growing obligations with your current salary.

Difficulty in Securing Credit

Since your credit score is dwindling, your chances of obtaining new lines of credit are significantly diminished. If you already carry a lot of debt and are applying for more credit, loan officers and credit card companies may see your current debt load as a red flag that you're unable to meet your debts and may therefore deny you credit as a result. Further requests for credit could also be seen as an attempt to generate quick cash to pay off your current debt load.

Difficulty in Securing Employment

A sub-par credit score and denial of credit can pale in comparison to the ultimate consequence of having too much debt--the inability to acquire new employment. If you're able to find another job you want, your credit score may prevent you from landing that job. Some companies use credit scores as a predictor of your future reliability as an employee. Too much debt on your record can convince your potential employer that you're unable to manage your resources properly and are therefore unemployable by that company.