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Three Loans that People Consider an Excellent Investment

Should you ever get a loan? Why not pay cash for everything? Is that even possible?

Technically the answer is yes, it is possible to pay cash for everything. And it is probably the prudent way to proceed. Why would you go into debt and owe all that money?

People often view loans as a negative thing in the modern world. It is proven that people get into trouble when borrowing money from a bank. You can also get into trouble if you borrow money from friends or family. And of course it matters what you borrow the money for. Some things may be helpful in the long run. Others, not so much. 

There are a lot of different loans on the market that are designed to meet your needs. In fact, some of these loans many people would actually call a good investment. Let’s take a look at several loans that many consider good and one that is a little more iffy. 


Buying a house is something that most people want to do in their lives. This gives them security, comfort and a place to raise a family. Additionally, it becomes a forced savings account as you pay down the principal of the loan each month. This is seen by many as better than paying rent to someone else. 

Furthermore, housing values generally appreciate in value. So you not only get the forced savings happening, you also gain on the bottom line of your net worth as the house value goes up.

Mortgages can be a very good investment, providing you with the means to build a financial legacy for your family. Escaping rent payments will enable you to put money into your home and give your family a chance at a better life. Mortgages must still be done properly though. This includes things like having a 20% down payment to avoid mortgage insurance, taking out a 15-yr. loan if possible to reduce interest payments and not letting your mortgage payment be anymore than 25% of your take home pay. 

Related Content: 4 Reasons Why Paying off the Mortgage Was Right for Us

Student Loans

Higher education can be a great way to improve your prospects in life. Going to college gives you the chance to move into new careers and build skills that will be very valuable. Studies have shown that those with a college education have better chance of getting a job that pays more. This leads to more opportunities to save and invest and grow your net worth.

Related Content: Does God Want Me to Attend College? 

However, learning can be extremely expensive. It seems that universities and colleges now charge a small fortune for the privilege of learning at their institution. For many, that means obtaining a school loan to fund their education.

That can be challenging under normal circumstances. And it can be even harder if studying abroad. Finding international student loans without cosigner or even loans within your own country can be challenging.

You will need to weigh the costs of whether such loans make logical sense and financial sense. Will the education lead to a career that pays enough for you to pay back the loan in a timely fashion? If so, it may be right for you to do then. 

Auto Loans

This type of loan can be debated as to whether it is actually an investment or not. The reason? Cars depreciate in value. That means, over time, the cars value goes down, not up like housing values or like getting a higher salary because you have an advanced degree.

Many people try to buy their car outright with cash. That is the best option. This can be hard when you don’t have loads of savings behind you. The best course of action would be to save until you can afford to pay in cash. 

If you don’t want to wait though, getting an auto loan will give you the chance to buy a car that you wouldn’t have been able to afford. This does provide freedom of mobility, perhaps to safely and reliably get to that job destination that provides a better career. 

With all of this in mind, you should be feeling ready to take on the challenge of finding loans that can be a good investment. It’s wrong to assume that all loans are bad, especially when you have so many options available that can improve your life. Of course, you can always talk to your bank for advice when you’re approaching this side of life.

Related Content: How to Make Sure You Never Need a Car Loan 

Leave a Comment or Answer a Question Below: Do you think an auto loan is a good investment? Did you have college debt you had to repay? If so, how long did it take? Did getting a mortgage change your life for the better or worse? 

Photo courtesy of Annie Spratt on Unsplash

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