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May 1, 2015 · A car loan might be considered "good" debt, if the following circumstances apply: You qualify for a super low interest rate (e.g. 0.9% to 1.9%). In that case, the manufacturer / dealer are basically subsidizing your loan to help sell their cars.
- Good Debt vs. Bad Debt
- Good vs. Bad Debt: Types of Bad Debt
- Final Thoughts
To help you decipher your current debt situation, we’ve laid out what characteristics make certain debts good vs bad.
Debt has traditionally had a negative connotation to it, even though there are plenty of examples of good debt that can be an asset to your financial portfolio. But there are plenty of other types of debt that can leave you with little to show for, including the following.
Not all debt is created equal. While most debt might not always be a good thing for your financial profile, other debt can help you build significant wealth over time. Like all types of debt, however, it’s important to make sure you’re financially capable of taking on extra debt so you don’t get in over your head.
Sep 13, 2021 · When a financial obligation goes unpaid—whether it’s a credit card, loan or medical bill—it may eventually be charged off as bad debt. In simple terms, a charge-off on your credit report...
Jun 11, 2024 · Auto loan debt relief refers to different strategies that can help a person who is struggling to repay a car loan. Options can range from keeping the car and working with a lender to...
Nov 7, 2024 · Settling your car loan debt can get you out of unmanageable monthly payments, but it impacts your credit score. Learn how.
Feb 25, 2024 · To determine if a debt is good or bad, check your interest rate, ask yourself what it’s for, and assess your plan to pay it back. Debt is a tool that, in the right circumstances, could help your financial situation. If you have unwanted debt—good or bad—you have options to get rid of it. What is good debt, and what is bad debt?
People also ask
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Nov 19, 2024 · Interest on a car loan is often front-loaded so early payments pay more toward interest and less toward the principal loan balance. A longer-term loan can lower the monthly...
