Try the tool
Debt Repayment Calculator
"All debt is bad" is a popular saying, but it is not quite right. Some debt can build wealth, while other debt destroys it. Knowing the difference helps you borrow wisely.
What is good debt?
Good debt helps you build wealth or income over time, usually at a lower interest rate:
- A home loan — property can appreciate and builds equity
- A student loan for a qualification that raises your earning power
- Sensible business finance that generates income
What is bad debt?
Bad debt funds things that lose value, at high interest rates:
- Credit card debt for lifestyle spending (often 20%+ interest)
- Store accounts and "buy now pay later"
- Financing a car beyond what you can afford
- Personal loans for holidays or luxuries
Try it with your own numbers:
Plan to clear your bad debt →The test
Ask: will this debt make me wealthier or poorer over time? A bond on an affordable home can build wealth. A credit card balance for takeaways just costs you interest. Clear bad debt fast with the debt repayment calculator, and check your overall debt burden with the financial coach.