There are tons of reasons why people choose to take on debt: You could acquire sizable student loans to help cover the cost of your undergraduate degree, accrue a small balance on your credit cards with unexpected holiday spending, or even take out a short-term cash loan to cover the rent until your next payday. But while all loans follow the same basic lending principles, there are definitely some types of debt that are wayyy harder to recover from than others. Before you make the decision to borrow money, scroll down to read about the six most popular types of debt that Americans owe — ranked from worst to best.

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1. Payday Loans: Quick cash loans have a certain appeal for people in a pinch — with relatively minimal qualification requirements and almost zero wait time, you can take out a small short-term cash loan with a fabulously low promotional rate at any one of the convenient payday loan shops in your city. However, those amazing promotional rates don’t last long… in fact, with outlandish fees and an annual interest rate that often exceeds 400 percent, payday loans snowball faster than any other type of personal debt. This leaves borrowers who can’t immediately repay their payday loans stuck in an interest-building nightmare — making it clearly the worst debt offender on our list.

2. Credit Cards: Any amount of credit card debt can be devastating if it’s paired with a high interest rate. According to a recent analysis by ValuePenguin, close to 40 percent of all American households carry some sort of credit card debt. Of these households, the average debt is over $16,000, making it one of the scariest and most common types of debt around. With the average rate of interest on credit card debt sitting incredibly high at nearly 13 percent, this risky form of unsecured consumer debt can accumulate fast — especially when borrowers opt to make only the minimum payments on their monthly bills.

3. Medical Debt: According to a report from the Kaiser Family Foundation, more than a quarter of Americans say that someone in their household is struggling to pay medical debt. Even if your medical insurance is able to shoulder some of the financial burden, every patient is required to pay the remaining balance not covered by insurance. If a patient cannot pay their bills for several months, the medical bill will be sent to a collection agency and appear on your credit report, and you could even be sued for the remaining balance. According to a 2007 study by The American Journal of Medicine, medical bills are the cause of almost two-thirds of all bankruptcies in the US.

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4. Student Loans: Even though student loan debt is technically classified as “good debt” (AKA debt that is an investment in your future and can elevate your earning power), taking on a sizeable student loan is still risky. According to personal finance site Make Lemonade, there are more than 44 million Americans who are still paying back their student loans, and the average student in the class of 2016 is carrying roughly $37,000 in student loan debt. With most students needing to take on a large amount of debt to pay for school, it can take decades for graduates to pay it off — in fact, a study from the OneWisconsin Institute found that on average it takes graduates of Wisconsin universities almost two decades to pay off a bachelor’s degree and 23 years to pay off a graduate degree. Luckily, most student loan interest rates aren’t as high the previous types of debt mentioned above. (Federal interest rates are hovering at 4.45 percent, and private loans average around eight percent, according to LendEDU.)

5. Car Financing: Most people can’t afford to simply walk into a car dealership, drop a heavy bag full of cash, and walk out with a brand new car. But while getting a fancy ride with a long-term loan might seem like a steal, it could leave you in a financial pickle if you’re not careful. If you do fall behind on your car financing payments, your car can be repossessed, and your credit score will plummet. The good news is that typical interests rates for car loans are between 1-10 percent, depending on your credit score and the time you wish to repay the loan — if you shop around for a good deal, having car financing debt could be one of your least expensive loans in the long term.

6. Mortgage: While your home mortgage will probably be the biggest amount of money you will ever borrow, the relatively low interest rates and notable personal gains that come with applying for a mortgage make it one of the best types of debt around. Most mortgages require a 5-20 percent down payment and, depending on if you choose a flexible or fixed interest rate, typical interest rates hover between 3-6 percent.

How do you prioritize when paying down debt? Tweet us @BritandCo.

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