What Is Debt, Really?
Debt is simply borrowed money — but the why and how you borrow makes all the difference.
There are two types:
✅ Good Debt: Helps you build assets or future income
❌ Bad Debt: Drains your money without adding value
With Vizzve, you can identify, track, and optimize both.
What Is Good Debt?
Good debt is like a stepping stone. It’s money borrowed for something that grows in value or increases earning potential.
Examples of Good Debt:
| Purpose | Why It's Good |
|---|---|
| 🏡 Home Loan | Builds property equity |
| 🎓 Education Loan | Enhances future income |
| 🚀 Business Loan | Fuels income-generating assets |
| 🏥 Medical Loan (Emergency) | Supports health, productivity |
Vizzve Angle:
📈 Vizzve helps analyze your EMIs and returns so you know if your debt is building wealth or draining it.
❌ What Is Bad Debt?
Bad debt is when borrowed money is used for depreciating or non-essential items — often driven by impulse or lifestyle inflation.
Examples of Bad Debt:
| Type | Why It's Bad |
|---|---|
| 💳 Credit Card Debt | High interest, no value return |
| 🛍️ Buy-Now-Pay-Later (BNPL) | Encourages overspending |
| 🚗 Car Loans (over budget) | Vehicle value drops fast |
| 💸 Payday Loans | Short-term fix, long-term pain |
Vizzve Angle:
🚫 Vizzve alerts you when your borrowing pattern leans toward bad debt and offers tips to restructure or repay early.
Key Differences Table:
| Feature | Good Debt | Bad Debt |
|---|---|---|
| Builds Wealth? | ✅ Yes | ❌ No |
| Interest Rate | Usually lower | Often very high |
| Tax Benefits | Yes (home, education) | Rare |
| Future Returns | Positive | Negative or none |
| Vizzve Recommendation | Plan, optimize, repay slowly | Avoid or pay off quickly |
How to Handle Each Type
Managing Good Debt:
Plan repayment (SIP-like structure)
Don’t over-leverage
Monitor value created (e.g., property price, business income)
Managing Bad Debt:
Pay off ASAP (highest interest first)
Avoid minimum payments
Use Vizzve’s Debt Payoff Tracker
FAQs
Q: Can credit card debt ever be good?
A: Only if you repay the full amount on time every month. Else, it’s bad debt. Vizzve sends smart alerts for due dates.
Q: Is buying a car on EMI a bad debt?
A: If the EMI exceeds 15% of your income or it’s a depreciating luxury, then yes. Vizzve helps you evaluate before you buy.
Q: Should I prioritize clearing bad debt first?
A: Absolutely. Bad debt has higher interest and no returns. Vizzve ranks your debts by urgency.
Conclusion: Make Debt Work For You — Not Against You
📊 Debt isn't black or white — it's about context and consequences.
With Vizzve, you can:
Analyze your debt health
Build good debt responsibly
Erase bad debt strategically
💡 Remember: Debt is a tool. Use it wisely, and you build wealth
Published on : 3rd July
Publisher : SMITA
www.vizzve.com || www.vizzveservices.com
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RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed.