Using Financial Debt to Your Benefit In 2012
Some have said it will be some time before the tight grip of recession is loosened. Others have pointed to the continued struggle that people are having when it comes to securing employment.
However, despite the overwhelming sense of gloom, there remain some significant chinks of light. In highlighting the top 5 benefits of debt, this guest post contributed by The Gap Partnership shows that hope can be found in the most unlikely of places.
Investing In a University Education
You may well have come across media stories revealing that university degrees are being devalued. However, figures released in 2010 showed that people with degrees were still earning 85% more on average than those without.
As long as you are pursuing an educational path with sound career prospects then it makes perfect financial sense to take out a loan. This is especially true, given that university students commencing their studies after September 2012 won’t have to start repaying borrowed funds until they are earning over £21,000 per year.
Starting a New Business
Any plans that you have for the establishment of a profitable business may not be realised unless you can obtain some financial assistance. A small business loan might be the ideal solution, allowing for the payment of rent, purchase of equipment and hiring of staff.
This form of finance is usually offered on a long term basis and it is often possible to secure reasonable repayment terms by shopping around. As long as your business is a success there’ll be no reason to worry about time consuming job applications or interviews ever again!
Expanding an Existing Business
Even if your business proves profitable it may still be necessary to secure funds for domestic or international expansion. The good news is that banks and other lending institutions are generally willing to offer good deals to companies with apparently bright futures.
The amounts that you have to pay back each month may seem insignificant when compared with the profits that your growing company makes.
A mortgage can most certainly be categorised under the term ‘good debt’. For many people it represents the only means of access to the property ladder. For others it can allow for the purchase of a second home, which could be rented out as a means of making money.
Businesses may take out a mortgage in order to buy commercial premises, from which significant capital gains can be made.
By using a debt consolidation loan to pay off a variety of debts you may end up in a position of increased financial security. This is a particularly good idea for anybody who is only just managing to pay off the interest on existing debts.
It will prevent the borrower from developing a poor credit rating and reduce the amount of interest that is incurred.