Debt is often thought of as a bad thing. You don’t want to owe someone for too long, especially when you have to pay back more than you borrowed as time goes on. But did you know that there is such a thing as good debt?
What are you getting over time from the debt? Did you spend too much with your credit card? If you can’t pay it off right away, you could end up owing a lot more than you started out with. This won’t be good for your savings or your credit score.
On the other hand, you may borrow money at a low interest rate. If it helps you to grow your overall wealth in the long run, like when you get a mortgage or a student loan, this can be good debt. It helps to make the full payments regularly, so your credit score will go up.
Getting a car, paying for college, or buying a home can all be examples of good debt. However, if you don’t do it right, it could become bad debt. Check out this article for more examples. If you’re planning on getting a loan, make sure you’re going to get something out of it that will serve you well. A debt is a responsibility that should not be taken lightly, and has the potential to affect you in both good and bad ways.