It is important to know the difference between good and bad debt.
Not all debt is created equal and when prioritising which debt to pay off, it can be beneficial to know the difference between good and bad debt.
RACQ Banks Eszter Cathcart said good debt should allow you to make money or save money, whereas bad debt usually ended up costing money.
An example of a good debt is borrowing money to purchase a home or an investment property, which may appreciate in value over the longer term, Ms Cathcart said.
Student loans, like HELP or HECS, are another example of good debt as theyre an investment in yourself, are interest-free (indexed with inflation) and theres no timeframe to repay the loan you only start paying when you earn a certain a…
Read the full article at: https://www.racq.com.au/living/articles/How-to-pay-down-bad-debt
