Why Good Debt and Bad Debt Should be Considered Better Debt and Worse Debt – Part 2
In the first post of a couple of days ago, we started digging on the implications of considering debt other “good” or “bad”. The big problem with this approach, we surmised, is that the moment any personal loan debt or any other financial obligation is deemed as “bad” (high interest rates and little lasting value), you risk stopping your periodical repayments altogether, which will hurt your credit score and your ability to apply for other online personal loans in the future.
What we started discussing instead, is that personal loans and other debts should be considered just as “better” or “worse”, which frames these debts in a different light that encourages you not to forget about the “worse” debt, but to just program and schedule your personal loan payments properly.
Let’s keep digging into what these concepts mean.
One of the major factors for considering debt either better or worse is the things that those personal loans are used to buy or acquire. For example, if you borrow some funds to get a home or a piece of land, this property will surely increase in value, making it definitely a worthy investment and its debt worthy of being called “better” debt. But even then, the sooner you repay those personal loans and other debts, the better it will be for you.
In order to better assess what can make any of your debts either better or worse, there are websites like ReadyforZero, which help people better plan the way in which they acquire personal loans or other debts. One of the aspects where websites like these helps a lot, is in assessing how a good credit score right after college is of utmost importance for anyone to start a healthy financial life. For this, it is suggested that students should carry a credit card or a small personal loan that can be easy repaid in order to create a good starting credit score that can help apply for personal loans online in a much easier way.
However, if you choose to carry credit card debt instead of personal loans, always be aware that this kind of debt can quickly escalate and become very hard to manage, especially if you are not a very organized person. So if you do, make sure to treat this debt just as if it were a personal loan and to repay everything on time and without delay, trying to get rid of that debt as soon as you can.
Additionally, everyone and their families should make the best education decisions possible without forgetting about their financial possibilities. In current times, it is no coincidence that student loan and personal loans are growing dramatically, with many of those not being paid at all. This puts a huge burden on students shoulders for when they exit school, since they are then worried about how to get rid of this personal loan debt. Of course, these personal loans are often a necessity, but they need to be use wisely and with a lot of planning ahead. Also, future students should avoid at all costs personal loans from for-profit universities, since they have a poor track of helping students actually find jobs that will allow them to pay off those personal loans.
The wisest choice for any potential student is to use any personal loan acquired at nonprofit universities. Not only will these personal loans will help you to achieve your academic goals, but, since they are being used at nonprofit universities, they are also far easier to manage when it comes to their repayments, as compared to other personal loans.
So, consider all your debt carefully, prioritize it, and with lick, all your personal loan debt will soon be “better” debt.