Is Debt Really That Bad?

One very commonly found perception about debt is that it brings along more problems than solutions, and is something that you should instantly steer clear off. What this does is paint these loans and their lending institutions as villains, and whole idea as a scam that designed to lure people into a financial abyss. In reality, nothing could be farther from the truth. Therefore, to evaluate this perception we assess what having debt really signifies.

Regardless of whether your debt is bad or good, the repercussions are quite the same. All loans have to be serviced and ultimately repaid. If the repercussions are so identical, how do you exactly discern a good debt from a bad one? By looking at the purpose it served. You read it right, by looking back and shedding light on what lured you into piling up the loans, you will be able to know exactly which basket to put your current debt in. However, in practice it might not be as black and white as it sounds, with many of the loans serving fruitful purposes, while many of them having reasons you currently regret. Nonetheless, you will know exactly what you are dealing with, and what to watch out for the next time around.

If the loans you took up to serve your expensive taste in cars are the reasons for your financial trouble, you are likely to have a hard time finding a silver lining in this scenario. This is not because this debt was accumulated on purpose, but due to the fact that you could have easily avoided it without any major repercussion. Same goes for debt that is not accumulated on purpose, but due to being remiss financial dealings. Perhaps you overspent your monthly income in the first fifteen days, leading to a need for a loan to bridge the gap in the other half of the month. The reason could be any, but the key is the feeling you get when you look back at the loans. For the above two reasons, the feeling is likely to be of regret. In stark contrast, consider a situation where your business took up massive debt to fuel a growth strategy overseas, or perhaps consider the debt that helped you through college. When you are going to look at the latter two reasons, the feeling would no longer be of regret. This is because these two loans were in fact to help you in productive ways, and thus, are likely to pay dividends which would more than make up for the cost and trouble of the accumulated debt.

In these four scenarios, the constant is the fact that the debt has to be repaid and interest payments have to be made, and yet the fact that you get different feelings by looking at them clearly proves the premise that no loan or debt is bad in itself. It proves that it is the purpose the loan serve that determines whether or not it falls in the good category or the bad one. Therefore, do not believe everything you hear but looking within your own situation and decide by making it the catalytic factor.

At BNI HamAndHigh Loans, not only do we pave your path to easily obtained and serviced loans, but also encourage you to make the most productive use of these loans. This way, no loan or debt has to be a source of regret ever again.