Debt – The good & the bad

Debt is a simple fact of everyone’s life – we all have a mix of both the good and the bad kind. Good debt can help you grow your wealth in the future and give you financial stability, while on the other hand, bad debt can only cost you money. Understanding the difference between the good and the bad is very important, especially when trying to improve your financial position.

What is good debt?

It involves the collection of assets – real estate, a professional qualification, investing in shares or funds or even assets for your business. They are good investments for the future as they may add value with time and thus generate wealth for you and your family. In some cases, the interest charged on these assets can also be tax deductible. This kind of debt that appreciates over time can put you in a better financial position.

What is bad debt?

This includes cars, consumables, personal loans, payday loans, and credit cards. Anything that depreciates in value over time is considered bad debt as they do not generate income. They have no future benefits to reap. This kind of debt can also have a negative effect when it comes to taking out a home loan.

It’s not too late to change!

If you already have bad debt, it’s not the end of the world – you can still work it off to put yourself in a better financial situation. When taking out any major loans, you will also have to disclose your credit card limit, even though you might not have reached it yet. It is also important to be aware of the hidden fees, early payout fees and application fees that come with these kinds of products. A better way of dealing with all this bad debt may be to consolidate it all into a single loan so that you can pay it off at a lower interest rate. The sooner you pay off your bad debt, the quicker you can eliminate it from your life.

What we can offer you

We can offer you an obligation free review of your finances and help you consolidate all your debt into a single loan. You might be able to shrink those monthly repayments and free up some extra cash. To read more about our debt consolidation options, please click here.

We also offer business finance loans for everything from computer and office equipment, to truck, farming and earthmoving equipment loans. With loans starting from $5,000 and over 30 lenders to choose from, you’ll be sure to get the most competitive rates the market has to offer. To read more about our equipment loan options click here.

Start dealing with your debt by speaking to one of our finance specialists today!

Contact your Pacific Finance Australia Broker on 08 9321 2120 or send us an email via