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Understanding the Different Types of Debt and the Best Solution to Pay-Off Debt

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Good Debts

Some types of debt are harmful to you, but some are generally considered good. The reason for that is some debts are acquired to build wealth or to invest in the future.

For example, a debt incurred to invest in the future is generally considered a sound financial decision and better than taking debt to pay for something you don’t need at the moment.

Below are common types of debt considered to be “good debts”:

  • Student Loans

Education is an essential aspect of life and is considered an investment; a student loan is an excellent example of good debts. 

  • Business Loans

If you borrow a considerable amount of money to supplement your business’ financial needs, that is good debt, and that decision to invest in a business is a good idea.

  • Real Estate Debt

A mortgage is one good example and is highly popular for young adults due to the loan terms and duration. Additionally, real estate property values increase over time; therefore, it is considered good debt.

If you are looking for an easy and legal debt solution, speak to our very professional and friendly debt specialists. Click the below button to get a free consultation.

Other Types of Debt Which Are Considered Bad Debt

Debts that do not contribute to your financial wealth in the future are considered bad debt.

  • Credit Card Debt

The most common types of debt are acquired thru credit cards and are often considered the worst. Credit card is very easy to use when purchasing goods and carries high-interest rates. Many people can only pay the minimum required payment every month which costs accumulating interest charges onto the balance.

  • Payday Loans

Without strict credit checks compared to other types of loans, payday loans are easily acquired. Payday loans are often short-term loans with incredibly high interest rates.

  • Personal Loans

This is the most often used to purchase goods for:

  • Home renovations
  • Vacations
  • Large ticket items such as appliances
  • Or to pay off other debts

A personal loan is very attractive for many reasons, including:

  • Can be used for anything
  • Can be obtained easily.
  • Can be for a significant amount.
  • Fixed-rate, fixed length of repayment, fixed monthly payments.
  • Lower interest rates compared to payday loans and credit cards.
  • Debts Owed to the Government

Money owed to the government is also considered a bad debt. Common types of debt owed to the government include:

  • Income Taxes
  • HST/GST remittances
  • Benefit repayments (CERB repayments)
  • Defaulted OSAP loans
  • EI or Employment Insurance penalties and repayments
  • Pension Plan repayments

Best Debt Solutions You Deserve for Any Types of Debt

Our government-approved debt relief program can help reduce and eliminate debt by up to 75%. This program will help consolidate unsecured debts over $10,000, including Credit Cards, Personal Loans, Car Loans, Taxes, CERB, HST, 407, Household Bills, Payday Loans and Student Loan.

Get a free consultation by answering a short quiz to know if you are eligible for the program. Thousands of Canadians have benefited from this program, and hundreds are taking advantage of this program every day.

By consolidating your debt, you’ll be able to enjoy the following benefits:

  • Creditor protection
  • Lower monthly payments
  • Reduced debt by up to 75%
  • Protect your assets
  • Chance to rebuild your credit

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