Debt Recyling … Good for you!
August 12, 2008 by Josie Kay · Leave a Comment
Have you heard the term ‘debt recycling’?
Simply means that you have taken out an investment loan to purchase an asset like shares or property, and then use the income from these investments to repay debt on the family home.
The reason it can be such a powerful strategy to reduce debt is that the interest applied on an investment loan is normally tax deductible, whereas the interest on the loan attached to the family home is not.
Therefore, it makes sense to pay the family home off first as you are paying with after-tax dollars.
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