Every person at some point of time in his/her life undertakes a certain amount of debt. Irrespective of the fact whether it is in the form of a loan from a bank or money borrowed from relatives or family members. What everyone forgets in the process are the terms and conditions of the debt. People seldom are able to differentiate between good debt and bad debt.
A debt may not always be bad. A credit card debt is not bad as long as you are able to repay the amount that you own before the time is up and provided that the amount your card company charges you yearly is less than 10%. Also, what should be kept in mind are the credit card usage charges which need to be low else the point of using a credit card holds no significance.
Similarly, A house loan is not bad. Provided that your easy monthly installment is being paid regularly and that you are able to pay back significant amounts of your total loan amount at regular intervals. However, if your easy monthly installments are not on time and at the same time the value of your asset i.e. your house is not appreciating the value of your house is going to decline continuosly.
A personal loan from a bank is quite a matter. You need to hand over a certain asset as security and if you are not able to repay the loan then it is bound to backfire. The only logical solution is to go for a gold loan which is charged at roughly 2-5% interest rate and is relatively lower than other forms of loans.
Debt whether good or bad is not justified. Had there not been so much debt in the economy the 2008 global meltdown would not have occurred. It is only when people start buying goods with money they don't have that a situation like the economic crisis of 2008 occurs.
So try and avoid debt as far as possible; it's for the economy.
With a hope of no debt
-Doodle
A debt may not always be bad. A credit card debt is not bad as long as you are able to repay the amount that you own before the time is up and provided that the amount your card company charges you yearly is less than 10%. Also, what should be kept in mind are the credit card usage charges which need to be low else the point of using a credit card holds no significance.
Similarly, A house loan is not bad. Provided that your easy monthly installment is being paid regularly and that you are able to pay back significant amounts of your total loan amount at regular intervals. However, if your easy monthly installments are not on time and at the same time the value of your asset i.e. your house is not appreciating the value of your house is going to decline continuosly.A personal loan from a bank is quite a matter. You need to hand over a certain asset as security and if you are not able to repay the loan then it is bound to backfire. The only logical solution is to go for a gold loan which is charged at roughly 2-5% interest rate and is relatively lower than other forms of loans.
Debt whether good or bad is not justified. Had there not been so much debt in the economy the 2008 global meltdown would not have occurred. It is only when people start buying goods with money they don't have that a situation like the economic crisis of 2008 occurs.
So try and avoid debt as far as possible; it's for the economy.
With a hope of no debt
-Doodle
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