When Not To Take Out A Loan To Pay Off Other Debts

Do you know when not to take out a loan to pay off other debts?            When Not To Take Out A Loan To Pay Off Other Debts

There may be other reasons for pursuing a loan, but you should never go into debt to pay down other debt in the following circumstances:

  • When the interest rate on the new debt is higher than the interest rate on the loan that you are paying down.
  • When you already know you cannot afford to pay back the loan.
  • When your home is in foreclosure.
  • To buy luxury items, go on an expensive vacation, or buy a new car. A used car is almost always the most financially savvy decision
  • If you have so much debt you don’t know where to begin. Bankruptcy could be the best option, but always talk to a financial planner before making this decision.
  • When taking out the loan will not enable you to pay off the full balance of the other debts

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The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness Hardcover – September 17, 2013
by Dave Ramsey (Author)
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The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness Hardcover – September 17, 2013 by Dave Ramsey (Author)

 

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