24 Jun 3 Types Of Debt That Aren’t Terrible
What kind of debt is considered good debt and which of your debts are hurting more than helping?
While there is truly no ‘good debt’, sometimes it can’t be avoided. When it comes to certain factors there can be a difference between good and bad debt.
Here are few types of debt that are considered good to have, or at least better than others.
Home Loans
There’s nothing quite like owning your own home. You get to maintain it how you’d like.
If you feel like you want to add hardwood flooring in the living room, or paint the outside of your home a different shade of blue, then you can.
This can’t be said about renting an apartment or renting another individual’s home.
Of all the debt you get, home loans stick around the longest because they are so large. When you buy the home you hope, it is going to increase in value, and you will get a return on your investment when you sell in the future.
It’s important you get with your Realtor when looking to buy a home to make sure you are making a solid investment. You can do this by having your Realtor pull comparable properties to gage the market in that specific neighborhood.
This can help you determine whether it will rise or fall in the future.
While this isn’t a sure way to determine whether your home is a solid investment, it’s definitely good to have an idea before you make the buy.
Student Loans
College is getting more and more expensive by the day. Everything you do from classes, to books, to dorm rooms, is going to add up to your yearly tuition.
While some may have those funds up front to pay the institution most college students have to rely on student loans.
Student loans encompass everything you spend at school and have to be paid back on a schedule starting after you graduate. This can mean you can accumulate thousands upon thousands of dollars in debt just by trying to achieve a higher education.
Now, this is where the good debt part comes in. Student loans are considered a solid investment because they are an investment in your future.
They help you get to the point where you can find a good paying career and you can pay them all back, plus a little interest. Don’t get discouraged by student loans though.
While they may seem hefty, nobody can put a price on a higher education and now more than ever college degrees are in high demand.
Small Business Loans
Have an idea for an amazing company you’re sure is going to make tons of money later on down the road. There are many folks out there that have huge dreams of success but just don’t have funds for the startup.
This is where small business loans come in. They can help your business get off the ground and get moving toward success.
They can help cover the startup costs of supplies that are needed to create the products you’re trying to sell. You can even use it to pay rent for the space to perform the services you’re trying to provide to people.
While most say small business loans aren’t necessary, that you should just do it all on your own, it isn’t always a bad thing to get started a little quicker. As long as you know you’re going to pay it back when business picks up.
This is why small business loans are considered a good debt they are an investment in your companies future. They help lay the groundwork for the amazing things your company can achieve.
Now, that’s not to say if you do have any of these types of debt you don’t need to take care of them as soon as possible.
Debt is still debt and you should never go searching for it if you have no need for it. And if you have it, have a solid debt management strategy.
Yet, if you absolutely have to have it these are the few that aren’t as bad.
Never let the overwhelming amount of debt you may have get the best of you.
Even though the amount of your home, student, or small business loan may be staggering, there are plenty of ways out there to handle it.
If you have any questions on whether the debt that you have is good or bad then please give us a call.
We’d love to sit down and go over the options you have of paying it off as well. We’ve helped many people achieve financial freedom.
Even though you may not have the worst kind of debt possible, we know you want to be free of it too.
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