Borrowing money can sometimes be a good decision, but can also lead to problems and harmful situations. Borrowing comes with the responsibility to repay, and to repay on time. You may also have to pay an additional fee to the lender for use of their money, known as interest. If you fail to repay, or even if you are late, you will likely face negative consequences, including additional costs and the possibility for legal trouble.
Before making the decision to borrow money, ask yourself these three questions:
1. Do I absolutely need to use debt to finance this purchase?
2. Can I easily repay or pay the monthly payments on this debt?
3. Am I comfortable with the proposed terms and conditions of the loan?
If the answers to those three questions are yes, then you should consider taking out debt. If not, it would be best to wait for a while and save your money so that you can finance the purchase without debt. To be clear, in nearly all situations, it is better to use your own money for a purchase and not take on any debt.
Shop around and ask questions about credits and loans to find the best deal and be informed. Try to avoid high interest loans and consider accredited financial institutions rather than local moneylenders.
In summary, debt is just like any other tool, extremely useful if used responsibly but very harmful if used irresponsibly.