Is All Debt Bad? Let’s Take a Look

We’re talking about debt this month and started off last week with how much more expensive debt is than it first appears. But debt is not always a bad thing.

Think about those big life steps; buying a home, getting a car, investing in education. Usually, that takes more money up front than most of us have sitting around. That’s where loans like mortgages, car loans, and student loans come in handy, letting you borrow and pay it back over time.

But just because you can get one of these loans doesn’t automatically mean it’s the smartest move. Here’s why:

Interest Rates: That loan isn’t just the sticker price. Take a good look at that interest rate and how much it adds up over the life of the loan.

Budget Reality: Can your budget handle the monthly payments comfortably for the entire loan period, even if things change down the road?

Other Options? Could you wait a bit, save up for a bigger down payment? Maybe a slightly less expensive used car would work just as well?

We’ve got a quick rundown on how much you qualify for versus what you can actually afford right here. And if you’re curious about how “secured” loans like mortgages and car loans work, we’ve got that covered too, just click here.

Bottom line: debt can be a tool, but like any tool, you need to know how to use it wisely.