There are always two aspects to debt, good and bad. The good one is that debt allows you to accomplish things you wouldn't otherwise be able to accomplish. Naturally, it is good to have more access to credit funds when you need them. The bad one is that debt leverages your finances, and reduces your financial stability. Your monthly payments are locked, you have to spend money on interest, you have less financial flexibility, etc. The question is how do you choose the compromise? The answer becomes simple if you look at the indicator called debt ratio.