Definition
Debt that isn’t due for repayment in the near future, such as a mortgage or long-term business loan. It’s planned out over several years.
What to consider
- Include these obligations in your long-range financial planning.
- Stay consistent with payments to improve your credit over time.
- Revisit your debt strategy periodically for potential consolidation.
Real world scenarios
- Hannah carefully evaluates her student loans, a significant long-term debt that spans multiple decades.
- Refinancing a 20-year bond can reduce Cameron’s interest payments but extends his firm’s liability window.
- Keeping track of long-term obligations helps Devon decide when to tackle principal aggressively and reduce total interest.
Related terms
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