Loans are easy to come by and available for nearly anything, a home mortgage, a car, a student loan at seventeen, to pretty much anything you can think of.
But just because you can get a loan, it doesn’t mean you should.
Basically, every time you hear the words financing available, or no money down, or no credit needed, you should definitely approach with caution.
Here are the most popular loans available to you, we’ve highlighted the loans you should try to avoid.
Mortgages
A home mortgage is typically considered a wise investment, allowing you to own property while building equity, but only if the deal makes sense for your current and future financial situation.
Auto Loans
Buying a sweet new car may seem like a great idea, but that large monthly payment for a depreciating asset is not a good move. Try to avoid auto loans whenever possible.
Pay for your cars in cash. If you can’t afford it, you can do without it. Think long-term instead of instant gratification. You’ll thank yourself later.
Student Loans
Student loans provide access to higher education, but they come with long-term obligations that can take decades to pay back. We are talking about hundreds or even thousands of dollars a month for the next thirty years.
Remember, only borrow what is absolutely necessary, and carefully consider the future earning potential of the degree you are seeking. If you’re not pursuing a STEM degree or attending law school, we recommend you reconsider borrowing.
Don’t squander this money, because you’ll be mad at yourself for a long time if you do.
Any Personal Loan
Personal loans can be versatile but often come with higher interest rates. Always try to avoid any type of personal loan or payday loan.
To Sum it Up
Basically, most loans should be avoided!
Your focus should be on building a solid financial foundation by staying out of debt, sticking to a budget, and learning to live with less.
Before falling further into debt with a new loan, we recommend checking out our guides below.
