Good Debt vs Bad Debt: Knowing the Difference

By Allen Krewzz

Published June 29, 2026Updated July 4, 2026

Good Debt vs Bad Debt: Knowing the Difference

What Makes Debt "Good" or "Bad"?

Examples of Good Debt

Education financing

A sensible home loan

Business borrowing

Even "good" debt is only good when it's affordable. Borrowing for a great purpose at an amount you can't comfortably repay turns an asset into a burden.

Good Debt vs Bad Debt: Knowing the Difference

What Makes Debt "Good" or "Bad"?

Examples of Good Debt

Education financing

A sensible home loan

Business borrowing

Examples of Bad Debt

High-interest credit card balances

Borrowing for depreciating wants

A Simple Comparison

Measuring Whether Your Debt Is Manageable

How to Use Debt Wisely

Conclusion

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