"Should I take a loan?" There is no one-word answer. Some debt helps you grow; some only adds extra pressure. Before you sign, answer five questions.
Debt is one pillar of financial health — not because of shame, but because of leverage. When it is heavy, even a small shock can shake your whole plan.
Good debt vs. bad debt
- Productive: for something that adds value or a necessary expense at a reasonable rate — for example, housing with repayment capacity
- Destructive: for instant consumption, high rates, no repayment plan, or when you have no emergency fund
Five questions before you borrow
- What happens without this loan? If it only makes life easier, you may not need it.
- What percent of income is the installment? Usually below 30–35% of net income is more reasonable.
- Do you have an emergency fund? Without three to six months of expenses, a new loan is riskier.
- What is the rate and total interest? Do not look only at the monthly payment.
- What if income stops for a month? How many months could you last?
Debt and your portfolio
Net worth = assets minus debt. You may have many assets but heavy debt. Sometimes paying down debt is the best "return," not a new investment.
A loan without questions sells tomorrow's purchasing power for today's comfort.
Summary
Write down the five questions before you borrow. You can also see your debt status in the free checkup.