Borrowing money can sometimes help with debt management

When most Tennessee residents think about managing their debt, they envision a system under which taking on new debt is absolutely forbidden. In reality, however, signing on for a new loan may actually improve one’s overall bottom line. That is especially true in terms of debt management and credit repair. An example is found in financing the purchase of a new automobile.

Even if an individual has set aside a chunk of money in savings, tapping into those funds may not be the best way to purchase a car. Often, the need for a new car arises out of an unplanned accident or high dollar auto repair need. Tapping into savings may make it possible to purchase a new vehicle without assuming additional debt, but it may leave one with absolutely no financial cushion to address any other unexpected money crunch.

A better approach is to secure a low interest auto loan with favorable terms. Doing so allows consumers to find a vehicle that meets their needs, without decimating their savings. It also provides a valuable opportunity to build credit, something that many individuals struggling with debt management are interested in.

Be sure to shop around for a loan that offers affordable terms. It is also important to avoid buying more car than is really necessary, or getting swept up in shiny bells and whistles that are neither necessary nor likely to be put to use. Purchasing a car is a big financial step, one that can further a Tennessee resident’s financial goals, including debt management.

Source: Forbes, “Is Debt The Devil? Financial Advisors Say ‘Not Always’“, Jeff Rose, Oct. 23, 2017