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  • October 22, 2020


Debt word is almost inseparable from our lives today. It sponsors all our financial requirements and needs to be handled with care. However, unfortunately, the challenges of the modern, speedy world and multiple financial fronts we obtain different types of debts. Some are the good ones, and some are the bad ones.

 The excess of domination of bad debts can cause substantial financial loss.  It is vital to work on preventive measures and turn the low debt into functional and useful debts. Never forget, the knowledge you get today becomes the saviour of tomorrow.

What Is Good Debt? What Is Bad Debt?

Before you learn the skill to transform bad into good debt, more important is to know the meaning of both the terms.

Good Debt
The debt that increases wealth with time and is owed for progressive reasons such as a mortgage, business loan etc.
Bad Debt
The debt that has no or minimal role in the improvement of your financial future such as credit cards, personal loans, car loans etc.

Tips to Turn Bad Debt into Good Debt

It may sound like rocket science, but in reality, the transformation of a poor debt into the good one is an easy process. If you follow all the related rules in the due manner, nothing is impossible.

  • Control the Credit Card Use

If you personify the debts, credit cards easily win the tag of a bad boy. They do not act in the desired manner for the financial support of humans. Their interest rates, monthly instalments quickly become monstrous in size. It is one of the most significant factors to catch the people in the debt trap.

  • You can turn a credit card into a good debt through the following tips –
    • Embrace self-discipline in finance life
    • Use a credit card for needs such as ticket booking, buying household things etc. and not for desires like amusement park visit, movie etc.
    • Do not keep multiple credit cards they stimulate spendthrift attitude in the holder due to the availability of increased credit limit.

The small changes in spending habits can easily make things happen in the required manner.

  • Obtain High-Interest Debt for Constructive Purposes

Usually, it is not advisable to take a high-interest loan/debt, but if you try to keep its purpose constructive, it is okay. For instance - a payday loan is for last-minute money crisis to fund an extremely important cause.

If you take a payday loan for a sudden need of funds to go on a weekend trip, it is of no use for the future. In fact, you only add a considerable burden because, after the fun of the trip, the personal finances have to bear the obligation.

Suppose you want to do intraday trading due to a hint of a massive profit in the share market but have insufficient money to buy shares. In such conditions, borrowing through a payday loan to buy the shares is at least a justified reason. Don’t you think so?

  • Use a Part of Personal Loans for Home Improvement

Personal loans can be attained for any purpose, whether it is a need or a desire. However, you can make their best use by using a part of the amount for a futuristic purpose.

Utilise a share of the borrowed money for home improvement. At least, that strengthens your house and increases its resale value. In future, it is possible to get a high price through a lucrative sale. We know that property prices can increase if the market is in favour of the sellers.

It is all about how you deal with the financial conditions. There are always smarter ways to play safely in finances and bring out the maximum from the available debt. With an in-depth insight into the money related subjects and debt management, you can literally bring a big difference.

  • Take Bad Credit Loan Not Only For Money Crisis But Also Rating Improvement

Yes, it is true.  Loans do not always feed only financial needs during the crisis. Sometimes a loan helps in the progress of the future. With the advanced and new age finance industry, several specialised loan products have emerged in the market.

Many people take loans for bad credit to improve their credit score. Due to past payment mistakes such as missed or delayed payments, they get into poor credit situation. By taking these loans, one can program the credit score performance to improve. You can try it. How?? Simple!

Borrow funds, use them for any desired purpose and do not forget to pay the instalments on time. With every timely repayment, the credit rating improves and in future, it becomes easy to avail other financial products easily. Also, there is no threat to your job due to an embarrassing financial background.

Now if you ask where to get a loan in Ireland with bad credit, then online lending is an advisable option as they make the good change happen fast. The flexible FinTech products take less time in procedure without any need for documentation.

  • Car Loans Are For Car Purchase and a Car Can Also Be Used For A Commercial Purpose
    Car loans too come in the category of bad debts due to two reasons: –
  • Car depreciation with time reduces its value in the future
  • Car loans allow you to borrow more than one car and thus increase the debt burden

Both the reasons have less or no contribution in a strong financial future.  Why not use your car for a new purpose. If you do not use the car often or if it mostly remains at home, rent it to a car share service.

By renting the car for a commercial purpose, you can pay the car loan instalments quickly also it generates an additional income. Indeed, the idea is workable for those with an intention to try new things and get most out of an asset.

The Final Thought Is

You can always turn bad into good with the best use of what you have in the name of debt. It is all on creativity and knowledge of the financial market. Money is like a magical creature with countless incarnations according to its use. Take out the smart outcome from the debts, divert their purpose for a constructive reason, and you can literally change bad debt into good debt.

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