Quote:
Originally Posted by DARFAP
There's good debt and bad debt. The three examples you provide I would place in the good (low interest) debt category. Bad debt example would be carrying a large credit card balance and only making minimum payments. In my case, I have a very low interest mortgage and car loan. I also have a second car loan at 0%. I've got the assets available to pay them all off, if need be. However, as long as I'm in the situation, I feel comfortable letting my investments sit and continue to grow (and they are).
|
Typically, a car loan would be considered BAD debt unless it carries an extremely low interest rate. Autos fall under the category of considerable depreciating assets, so a loan to finance this purchase is not recommended. Even just purchasing a new vehicle is considered a poor financial move. Now, if this vehicle allows you to commute to work more efficiently or brings some other financial gains, then a loan can be advisable.