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Most people have been taught that certain kinds of debt are “good,” and that others are “bad.” But debt doesn’t always fit into neat categories. Take a look at some misconceptions about good debt vs. bad debt, and use the facts to get a better handle on your finances. You can consider this your personal debt payoff planner.

Good debt misconceptions

Myth: Putting a 20% down payment on a mortgage is always a wise move.

Fact: Buying a house can be a good investment, especially if the value of your home outpaces inflation. But while there are advantages to putting 20% down on a mortgage, saving that much dough isn’t always easy. Putting less down allows you to tackle important short-term goals like paying off student loan debt, and make headway on long-term goals such as saving for retirement. Consider this: In 2019, the median down payment for a home was 12% , according to the National Association of REALTORS®. (And with SoFi, qualifying borrowers may qualify for a mortgage with as little as 5% down.)

Tip: Get your mortgage rate in just two minutes. If you already have a mortgage, refinance for a lower rate. You might be surprised how much you can save. Currently, mortgage interest rates are at historically low levels. The average interest rate for a 30-year fixed rate mortgage was 3.230% in March 2020. Refinancing could allow qualifying borrowers to secure a lower interest rate on their mortgage.

Myth: High-interest student loans are a fact of life.

Fact: Yes, student loans allow you to get the education you need to secure the career you want, but that doesn’t mean you have to stick with the terms you were initially given. After you graduate, you can refinance your student loan to secure a lower interest rate and save money over the life of the loan.

Note that relief bills for the COVID-19 pandemic have extended borrower protections like the suspension of federal student loan payments and 0% interest rates through Sept. 2021 . Refinancing federal loans would eliminate them from these protections.

Myth: Student loans take at least 10 to 20 years to pay off.

Fact: With a little discipline, it’s possible to pay off student loans before you’re old and gray. Borrowers have the option to pay more than the minimum due. It’s amazing how quickly an extra $50 or $100 toward the principal adds up!

Another way to prepay student loans (or pay more than the minimum) is to schedule bi-weekly payments instead of monthly. By making one extra month of payments each year, you’ll chip away at your student loan that much quicker.

If you’re planning on making over-payments, double check with your loan servicer to be sure that payments are being directed to the principal value of the loan.

Bad debt misconceptions

Myth: Credit cards are nothing but trouble.

Fact: Credit cards aren’t inherently good or bad; it’s how you use them that determines their harm or value. Using credit for purchases that you pay off in full each month is smart because that diligence boosts your credit score. (On the flip side, never carrying a credit card balance means no payment history or late payments, which may hurt your score.) Plus, plenty of credit cards offer rewards, such as discounted travel, purchase and fraud protection, and cash back on purchases.

Recommended: 4 Simple Money Principles to Financial Fitness in Under 4 Minutes

Looking for the optimum amount to charge? Here’s a good rule of thumb: Keep the debt ratio below 30% of the credit limit. So, for example, if the limit on your credit card is $10,000, make it a habit to charge less than $3,000 each month. And pay off that full amount each month as well.

But those who are struggling to make the monthly payments or are in credit card debt, there are options to get that under control. One route to consider is consolidating credit card debt with a personal loan that offers a lower interest rate and a fixed monthly payment to pay off that credit card debt.

Myth: Getting a personal loan for a home renovation is a bad idea.

Fact: A personal loan could be your best friend when you need funds for home renovation and decoration. Contrary to what you might have heard, getting a personal loan for this purpose could be a tool that potentially improves its resale value.

For homeowners who have built up significant equity in their home and are planning a major renovation, a home equity loan is another financing option. If you owe $200,000 on a home valued at $500,000, for instance, you can apply for a home equity loan of $300,000. But for newer homeowners with little equity in their home, or those interested in smaller projects like a one-room remodel, a personal loan could be an option to consider.

Either way, it’s best to avoid spending more than is affordable or within budget. Keeping a home renovation on budget and working with professionals who will help you develop a plan of action and advise you on costs can be a smart move, depending on the scale of the renovation you are working on.

Myth: Auto loans are a waste of money.

Fact: Not necessarily. Only you can determine which expenses make sense for your budget and lifestyle. In 2020, the average monthly payment for a new car loan was $576 and the average loan term was 69 months. That’s not exactly spare change. There are ways to keep costs down, however.

If you buy an electric car, you’ll save money on gas ($800 to $1,000 annually ) and say goodbye to oil changes forever. And don’t forget to factor in the tax credit from the federal government (up to $7,500 ) and possibly even your state.

The Takeaway

Today, debt is more personal than the good debt vs. bad debt debate would have you believe. Rather than trying to classify your debt, consider the interest rates of each loan. Maybe you scored an auto loan with a low interest rate, but got stuck with a mortgage with a sky-high one. Securing a lower interest rate is a key part of any debt payoff plan, helping you transform “bad” debt to “good.”

Also, consider the value that things like education, a home, and travel add to your life. Education can open doors to a more lucrative and fulfilling career, your home can be an investment, and travel can provide the joy of exploring new corners of the world. Spend time thinking about your situation and determining your specific financial, career, and relationship goals. Then, based on those goals, develop a debt payoff plan that makes the most sense for you.

To learn more about managing your debt, contact a SoFi financial planner. In the meantime, share this article with someone you know who is struggling with debt—good, bad, or anything in between.

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If you are looking to refinance federal student loans, please be aware that the White House has announced up to $20,000 of student loan forgiveness for Pell Grant recipients and $10,000 for qualifying borrowers whose student loans are federally held. Additionally, the federal student loan payment pause and interest holiday has been extended beyond December 31, 2022. Please carefully consider these changes before refinancing federally held loans with SoFi, since the amount or portion of your federal student debt that you refinance will no longer qualify for the federal loan payment suspension, interest waiver, or any other current or future benefits applicable to federal loans. If you qualify for federal student loan forgiveness and still wish to refinance, leave unrefinanced the amount you expect to be forgiven to receive your federal benefit.

It’s a very modern conundrum: How do you constantly achieve more, while often making do with less?

At work, do you find yourself needing to sell more widgets, create more content, get more users—but do it all with a smaller budget, less human power, less time?

In your personal life, you’re trying to see more friends, have more fun, buy the latest gadget, save more money—attempting to do it all with less free time, less savings once you’ve paid your bills, and less energy after worrying about how to juggle all the things.

So how the heck can you make it all work… and maybe even have some fun while doing it? How can you get more productive without completely burning out?

When it comes to your career development, it pays to take matters into your own hands. If you’re waiting for a manager or mentor to tell you exactly what you need to do in order to grow your skill set or get promoted, you could be waiting forever.

If you are thinking of getting a new job, changing industries, or have bigger ambitions than your current role, your boss may not even be that interested in helping you. No one knows you better than you know yourself.

Career development means more than just taking a class or going to a networking event—it’s thinking two (or more!) steps ahead for where you want to go and grow in your career, and what you need to learn or experience to get there.

Whether you’re just starting to think about getting pregnant, or you’re back at work after your second (or third!) baby, there’s no doubt about it: when it comes to family planning, there’s a lot to think about.

From what choices you should make in your career, to the changes you may need to make to your finances, you’ll want to do some research and start planning ahead as early as possible. There are no right or wrong answers to this whole parenting thing (seriously!)—there are only the best choices for you and your family.

Let’s start from the beginning: what should you prioritize when you’re first starting to think about welcoming a new addition to your life? Let’s break down some common questions about how bringing a baby into your life will impact both your finances and your career.

After a rough day at the office, have you ever wondered what it would take to be your own boss? As someone who’s been there, I have a few suggestions. It may sound great—no boss breathing down your neck or annoying co-workers to contend with—until you realize how much you relied on that steady paycheck and benefits.

First and foremost, you need something you can sell to others. That might be your time, in the form of expertise or services, or it could be a product that you make or resell. Or you could ditch the traditional 9-to-5 by joining the gig or sharing economies.

You’ll also need to think through lots of practicalities. What business model will allow you to make enough to cover all your expenses and still set aside some savings? Where do you work best? At home, in a coffee shop, at a coworking space? If your employer was previously providing health insurance, where will you get it now?

Being your own boss can be extremely rewarding, but it’s not without its own challenges . When you’re in charge, who’s going to cover for you when you get sick or want to take a vacation? Who’s going to provide matching contributions to your retirement fund?

There are many things to mull over and they may differ with each person and scenario. To get you thinking about how being your own boss might work for you, here are some things to consider from people who are making working for themselves work.