5 debts you should pay off now – or later

first_img continue reading » From mortgages to credit cards, all debt is not created equal.by: Geoff WilliamsYou often hear that there’s good debt and bad debt. That’s probably because we’d all be depressed if financial experts went around referring to bad debt and worse debt.After all, it’s challenging to live without owing somebody something. If you want to buy a house with cash, by the time you save up enough, it may be time to head to the retirement home. If you’re saving up to buy a car free and clear, you may have to spend a lot of years riding the bus. Most people get through life by borrowing money.So, sure, there’s good debt (the kind you probably can’t avoid carrying) and there’s bad debt (the kind you should try to get rid of sooner rather than later). One key to determining which debts to pay off now versus later is the interest rate: The lower it is, the longer you can carry the debt without it becoming a burden. Here are some guidelines to help you prioritize your debts.Mortgage: Pay off later.The reasoning. If you have a large mortgage, and you win the lottery or come into an inheritance that allows you to pay your house off easily, doing it now is probably not a bad idea. As Jesse Walton, Jr., a vice president at the Walton Group at Morgan Stanley, says, “Paying off debt early is almost always a positive thing.” That includes mortgages. 4SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblrlast_img

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