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Informative Essay: Seven Key Points About Debt

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Seven Key Points About Debt
By Steve Gears | Submitted On October 26, 2010

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When used intelligently, debt can help build wealth and security for your family. However there is a distinct difference between good debt and bad debt.

So, what features demonstrate good debt?

The debt creates wealth
For example, a student loan is generally 'good' debt because a degree qualified person will typically earn more over their career than a non-qualified person, and this is likely to be more than the value of the student loan. Another example of good debt is a business loan which allows a company to expand, take on more work and earn more profit, so creating value. …show more content…

The debt allows you to demonstrate good money management and establish a good credit history
For example, most people will buy their first car before their first house. Being able to show that you can pay off your car loan over five years, will stand you in good stead when you wish to borrow more in later years.
We should also ask the question what features demonstrate bad debt? They're not simply the opposite of 'good'

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