There will come the point in life when you enter into debt. Rarely will you get away in life without accumulating some form of debt. Whether it is credit cards, mortgages, student loans or borrowed money from a friend, they are all forms of debt.
But sometimes it is okay to be in debt – depending on the type. There is such a thing as good debt, compared to the commonly known bad debt. So if you find yourself, or hear the word debt, take a step back and re-evaluate what type of debt you have.
Consider some of these reasons why going into debt is okay.
Education (Student Loan)
If you went to college after graduating high school, chances are you will, or have already acquired a hefty student loan. But this is okay. A student loan shows that you went to college to further your education. How can anyone fault you for that?
Plus after finishing post-secondary school, you have a degree that allows you to access specific jobs that others without education would be able to. That means more than likely a higher paying job with a better chance to pay everything off.
When you buy a house, it is doubtful you will be able to pay everything in cash. So you go to the bank and get a mortgage. This will be considered good debt because buying a house is an investment. If the housing market works in your favor, by the time you sell your home the value should have gone up. So when you sell, you actually make money off of the house.
If you are looking into a consolidation loan, don’t shy away because of the word loan. What you are doing is taking as much of the bad debt as possible (credit cards, bank loans, etc.), and putting it under one low-interest loan.
Usually, bad debt comes with high-interest rates that make it hard to pay off quickly. So by going with a consolidation loan, you are now required to make only one monthly payment that is usually more affordable.
The downside of consolidation loans is that it frees up the credit cards that got you to where you are in the first place. You must stay dedicated to paying off the consolidation loan without racking up more credit card debt.
Although they are not necessarily considered good debt, quick online loans can be beneficial. These types of loans are fast approval with access to reasonable amounts of cash. They are suitable for when funds are tight, and an emergency pops up.
But you will still have to pay it off. Usually, these loans last for about a year. However, if you do not pay them off in time, the interest rates are quite high.
So if you find yourself in a little bit of debt, do not worry. Re-evaluate your situation and see which debt is good, and which is bad. That will also help you decide which debt to tackle first when it is time to pay everything off.