We all take loans like home loans, personal loans, business loans, car or vehicle loans etc for various activities. But how to take loans so that it doesn’t kill our financial stability? in the article, I explain clearly in English the difference between a good debit/good loan and a bad debit/bad loan. Good loan vs Bad loan. People commonly think that taking a loan is not a good thing and it will bring a financial burden. Is it right? The financial education we have got had taught us like that. So, we used to keep a distance from taking a loan from banks. Even if we took a loan for some emergency needs we try to take a lesser amount and be hurry to pay it back as soon as possible. The fear and a detached approach toward taking a loan are the ones fact to be stressed on thinking about it.
Is loan really a burden?
How could it make as useful one?
If we approach it in a scientific manner, by analyzing the cause of taking a loan, the way we are going to use it and the benefit we aimed through it we could take a loan in a good way. Good loan will definitely help us. Just think about the famous businessmen around you. Most of them are doing business by taking loans in a systematic way. Hence, rich people are getting richer.
How could we take good loan?
it is very simple. If we take loan for buying an asset that brings money to our pocket itself it will be a good loan. We could make money out of that and the loan can also be paid back from it. The remaining profit will be in your pocket. On the other hand, if we take a loan to buy a liability that takes money from your pocket it will become a financial burden and a stress maker.
Is constructing a home is an asset?
Is buying a vehicle in a loan is ok?
Good loan vs Bad loan. If we construct a house by taking a loan and live in that it will not be an asset. Because we are spending money on that home for its maintenance and paying taxes and all. On the other hand, if we are giving it for rent it will bring money to us and here we are investing money to make money. It is the same in the case of buying vehicles with a loan.
How it will work
Good loan vs Bad loan. If we buy an asset by taking loan we will get a fixed income from it. Even after paying back the loan the profit can be used as personal earning. If there are numerous assets we will become financially free and we can live a joyful life without being tensed about financial matters. After that, we can take a loan to buy a liability. But make sure that you have a fixed income to compensate for your expenses.
What are good loans?
- If you have a plan to generate revenue, taking a loan for the area of real estate is a good idea.
- Also as I have mentioned earlier rental homes and vehicles are also beneficial.
- Taking a loan to conduct a well-planned business that have a high probability to become a success is also a better way
So, there is no point in being afraid of taking a loan. Analyze the cause and effect of your actions. And just think before action.