High Interest vs. Low Interest Debt
Let's Cultivate (W)health
〰️
Let's Cultivate (W)health 〰️
Do you know what type of debt you have? Do you know the interest rate on your debt? If not, after this post I hope you will! Knowing your interest rates can be eye-opening.
For example, you may have student loans or a car loan. Those interest rates are usually 6% or less and considered low interest. This debt can be considered "okay" debt.
On the other hand, if you have credit card debt or a personal loan with a higher than 6% interest rate, that is considered as high interest debt. You want to avoid this debt as much as possible, especially if you are racking up debt for discretionary expenses.
The difference in interest rates can distinguish the type of debt you are tackling. If you are paying off low interest debt like me, you may want to invest in addition to paying off debt. However, if you have high interest debt, I would pay that debt off first.
Did you learn something new about debt with this post?
Will you go look up your interest rates if you don't know them?
invest early & invest often
**disclaimer: this is not financial advice. this is only based on my experience. please always do your research.**
