What you need to know about good debt and bad debt

  The proverb "it takes money to make money" defines good debt. It is a beneficial debt if it allows you to create additional income from your investment or through its appreciation in value. They usually have cheaper interest rates than other types of loans. But there is also a proverb that says “too much good is bad”. Overstretching your finances may leave you with insufficient funds to fulfill other critical financial goals or deal with unexpected events. The best example of good debt can be a home loan, as it has numerous benefits such as tax benefits, and the lowest interest rates, and it is an asset that you own for a longer duration. Another good example could be an education loan, as it also comes with lower interest rates and you gain vast knowledge from your education which stays with you for life and could be the best investment you could ever make.  Any debt you take out to possess depreciating assets is considered bad debt. You've turned to bad debt if th...