A good rule is in regard to what the asset (what was bought with the money) will be worth in the future. For example, a house appreciates or increases in value each year. That means that if you borrow money, the house may be worth more than the purchase price and the interest paid when you go to sell the house. The rule is Only Borrow Money On Appreciable Assets. It's okay to borrow on something that will be worth more in the future. And the opposite is also correct, never borrow if the item that is being purchased will be worth less in the future. Only pay cash for those items.