GOOD DEBT VERSUS BAD DEBT

Borrowing money means access to funds or capital now, with the trade-off of needing to repay that debt with interest in the future. Such debt, however, can have positive or negative consequences, and its intended use and repayment structure determines whether it is “good” debt or “bad” debt. “A simple rule about debt is that if it increases your net worth or has future value in helping you progress financially, it is considered to be good debt,” says James Williams, head of marketing for short-term lender Wonga.