What are Good Reasons for Getting into Debt?

Some people are totally against all types of debt. However, borrowing money can be really useful to us at times. It is well worth thinking about where it could be useful so that we make that we do take the opportunity to borrow money when we really need to and when it will really benefit us. Below are some examples of when borrowing could be extremely useful.

To Pay for University

Most students will pay for their university fees using a student loan. This is a scheme which is very different to normal lending because it is means tested. Firstly, the amount they can borrow towards their living expenses will be determined by the income in their parental home (or wherever they are living before going to university) and the repayments will be also be means tested. These are not taken out until the borrower leaves university and then they will pay a percentage of their salary up to a certain limit. This will be a small amount and if they are not earning over a certain threshold, they will not need to make any repayments. After thirty years, anything that is not repaid will be written off by the government. This is a very different type of borrowing and it is designed to be affordable, even with no guarantor. It also will lead to the borrower getting a qualification (hopefully) that will enable them to get a better paid job. This means that they will be able to make back the cost of the course and the cost of the loan (assuming they pay any costs which will only happen if they repay most of it) in the increased salary that they will get as a result.

To Pay for a Home

Many people will use a mortgage to pay for their home. This will allow them to buy a house and once the long period is over, which tends to be between 35 and 40 years, although sometimes moving house will increase the term, they will then have a home to live in and not have to pay rent. A home is sometimes classed as an investment as the money paid for it will go up in value because the home will normally go up in value. However, this is not always the case with a house and you cannot get the money out of the home unless you sell it and then you will need to find somewhere to live and pay for that. However, it could be something that you will pass on to your children, perhaps and so the money will not be wasted as it will stay in the family and if you get stuck for money you could sell it and downsize.

To Pay for Work Related Items

If you need items for your job and cannot afford them, then borrowing can be worthwhile. This would include things like suitable clothing, cost of travel or relocation even perhaps buying a car to get there. Without these things, it could be the case that you will not be able to do the job and that will bring in money for you so it could be that you need to buy them and perhaps do not have the money so will need to borrow so that you can do this job and earn more.

Sometimes it is not always so obvious, what the right thing will be to do with regards to borrowing. It is not always easy to tell whether something ill be worthwhile buying or not. However, as long are thinking about it, that is a great start. Weight up the pros and cons and that should help you as well. Consider what positives will happen as a result of you borrowing the money as well as any problems you might have with regards to repaying and this should help you to be able to make up your mind.

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I enjoy specialising in writing about money and finance. This is because I like the idea that I can help people with the things that I write and by writing about a topic where many people struggle, it means that I am able to do this. It is a shame that many of us have not had any formal teaching about money, bit hopefully we can all help to educate ourselves by learning more about it. I hope that my articles are a stepping stone in that direction and readers will be encouraged to learn more and more so they can make changes to become wealthier.

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