Good Debt and Bad Debt

Good Debt and Bad Debt

Since childhood I have always associated the term debt with a very dangerous financial obligation for one’s finances, and in fact it is, but as long as it is bad debt : that debt that is contracted when buying something for a perishable consumption and carried away by the emotion of acquiring an article that in a very short time would lose value and that would not pass on to the buyer new income, at the expense of debt and that in the medium term can pose a problem economic.

But in contrast to this type of bad debt, there is good debt, which is based on the existing boom in the requests for microloans: The good debt is that debt that is contracted but will short-term benefits or substantial savings.

I tell you my own experience that I had a few days ago: With the stress of work I left my car parked in a parking lot called “green zone”, which is cheaper than the blue zone car parks, but with little caution on my part to check the vertical signs: they had reserved 5 places for exclusive loading and unloading parking from 9 to 15 hours. And I “ate it with potatoes”

When I returned to the place to take the car, I found myself without a car and with a famous green sticker where I was told that I could withdraw it from the municipal police depot.

The joke of the withdrawal of the vehicle cost me 100.10 euros and a fine of 90 euros (the fine if paid in the first 15 days was reduced by 50%) but not having enough money had to wait to collect the Payroll, but researching and making my own accounts, I realized that I could ask for a fast loan for example to Bankil or Banksedia to pay only half of the fine (45 euros) and with the payroll to return the fast loan requested, with which I would save 30 euros.

The case that you are exposed to is a clear example of good debt: contracting a debt with the request for microcredit with me that the final result is more favorable than having waited at the beginning of the month to collect the payroll and thus pay the fine in full : 90 euros.

It is about the ROI (Return on investment) is greater than the debt incurred, and thus allows you the final balance of money to be positive in your favor.

Sometimes good debt can mean a significant saving of money for many families to help them make ends meet more easily.