It is always wise to borrow less rather than more. Cultivate the mindset that you will only borrow for absolute necessities and that you will repay the loan at the earliest possible date. Paying back a larger amount than the required fixed payment will help you retire the debt early. What should you not be getting a loan for and what would be something worth borrowing for? In general, it all depends on your ability to repay the loan within a practical period of time.

While you could obtain credit to purchase an asset with reasonable potential to gain in value, you should not borrow for something that will continue to lose its value from the moment you buy it. Another sensible cause for which to borrow money would be for something obtained that would bring you income opportunity. If you have a skill or a trade and purchasing a particular tool or machine would generate additional income for you, then credit might be a possibility to explore.

Your thoughts on this subject? Your comments appreciated!

Content © Rich Brott, 2011

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