It sometimes gets a bad rap, but borrowing money isn’t always a bad thing. April is Financial Literacy Month, making now a great time to learn how to borrow responsibly.
One of the five key principles of financial literacy — in addition to earning, saving and investing, spending and protecting — according to the Financial Literacy and Education Commission, understanding the basics of borrowing is essential. There are plenty of reasons to borrow money, including buying a home, purchasing a car, investing in your education and paying off debt.
In 2020, consumer debt reached a record-high $14.88 trillion, according to Experian. Taking a closer look, the average consumer had a total debt balance of $92,727. For the total consumer debt amount, this is a 6% increase from 2019, serving as the highest annual growth recorded in more than a decade.
Whether you’ve already taken on debt or plan to in the future, it’s important to borrow money wisely. Knowing the basics like how to build good credit and understanding APR can help you make positive financial decisions.
Ready to learn how to borrow money in a manner that allows you to stay financially healthy? GOBankingRates is here to educate you on borrowing responsibly.
Take a look at our guide on borrowing:
- What Is a Good Credit Score?
- How To Check Your Credit Score
- How To Build Your Credit Score From Scratch
- The 5 Fastest Ways To Boost Your Credit Score
- What Is APR?
- How Do Credit Cards Work?
- How Many Credit Cards Should You Have? And More Credit Card Questions Answered
- 10 Things Most Americans Don’t Know About Credit Cards
- Comparing Private Student Loans vs. Federal: Which Is Better for Borrowing?
- The College Student’s Guide to Smart Student Loan Borrowing
- What Is an FHA Loan and How Does It Compare to a Conventional Mortgage?
- Adjustable-Rate vs. Fixed-Rate Mortgage: How They Can Impact Your Finances
- What Happens When You Miss a Payment or Default on a Loan?
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