(833) 839-2274  157 N State Road 7, Plantation, FL 33317

BlogBlogBad Debt Versus Good Debt

Bad Debt Versus Good Debt

Improved-CreditThe average United States household has thousands of dollars in debt, and that does not include housing or mortgage debt. The typical household that owns at least one credit card has well over $15,000 worth of debt. While being too much in debt is certainly troublesome, not all debt is bad. Here’s a look at good debt versus bad debt.

 

Types of Bad Debt

 

  1. Car loans. Owning a car is a must these days, but many people get into car loans where they end up paying thousands of dollars more than what a vehicle is actually worth. As soon as the car or truck is driven off of the lot, it begins to depreciate. If at all possible, save your money and pay cash for a vehicle. You will save thousands of dollars in interest.
  2. Credit card debt. If you do not pay your credit card payments in full each and every month, you should know that you will wind up paying thousands of dollars in interest. When you do not pay a balance in full, the remaining unpaid amount is subject to interest rates upwards of 20 percent. The $100 pair of jeans that you just had to have will end up taking you over a year to pay off if you choose to make just the minimum payment. Excessive credit card debt leads to serious financial problems like foreclosure and bankruptcy.

 

Types of Good Debt

 

  1. Real estate debt. Owning a home has many benefits. Most people buy a home and live in it. Real estate can also be used to generate a profit. Renting a property for more than the monthly payment can generate an income. Some will even buy properties and sell them for a profit. Regardless, holding real estate debt has long been considered favorable.
  2. Student loan debt. Student loans are considered good debt, since those who take them are investing in their education. There is a positive correlation between a higher education and an individual’s earning potential. An investment in a degree can pay for itself within a few years of employment.

 

There is some gray area between good and bad debt. For instance, using a car title loan as a form of debt consolidation can help someone by providing lower overall monthly debt payments, but still leaves the person with debt. Embassy Loans of Florida, for example, has helped thousands of customers obtain car title loans for a variety of reasons. Consolidating debt makes sense for many people. To learn more about good and bad debt, speak with a financial services representative.

 



Embassy Loans is a leading provider of auto title loans since 2005

Get In Touch

Embassy Loans Inc. is licensed under the “Florida Consumer Finance Act” and as such Embassy Loans is exempt from any licensing requirements under the “Florida Title Loan Act” to the extent that any of Embassy Loans’ activities involve the making of a loan of money to a consumer secured by bailment of a certificate of title to a motor vehicle.

Monthly Interest Rates range from 1.5% to 2.5% (18% to 30% APR), with 15-18 Month Terms.

No Prepayment Penalties!

Embassy Loans uses “Title Loans” for advertisement purposes only and provides auto equity loans. Embassy Loans Inc. is licensed under the “Florida Consumer Finance Act” under Florida Statute 516 and as such Embassy Loans is exempt from any licensing requirements under the “Florida Title Loan Act” to the extent that any of Embassy Loans’ activities involve the making of a loan of money to a consumer secured by bailment of a certificate of title to a motor vehicle.

© 2024 · Embassy Loans · Site built by DMA

Frequently Asked Questions

What is an Auto Equity Loan?

An auto equity loan, sometimes known as a car title loan or a car equity loan, is a type of loan that allows you to borrow money by using your vehicle as collateral. The loan is secured by your vehicle, meaning you agree to use the equity in your car to back the loan. 

What is an Unsecured Personal Loan

An unsecured personal loan is a loan that does not require collateral. Funds are provided based on your credit worthiness and your ability to repay. 

What Is the Credit Builder Program

The credit builder program is designed to help individuals establish or improve their credit score with the primary purpose of building a positive credit history through regular payments.

Can i have more than one Loan at a time?

Embassy Loans can only extend one loan at a time and it’s advisable to start with one and focus on making payments in a timely manner to prevent default.

What happens if I miss a payment?

Missing a payment can have negative consequences, including late fees, a drop in your credit score, and potential default on the loan. Consistent, on-time payments are crucial to benefit from the program.