“Good debt” is often used to describe borrowing to buy an asset or generate income. “Bad debt” often refers to expensive borrowing or debt that is beyond the borrower’s ability to repay. These labels do not replace an assessment of the contract and its risks: a business loan can lose money, and an asset bought with borrowed funds can change in value.
Four Things to Review Before Borrowing
- Purpose: Is there a reasonable basis for expecting the loan to create a benefit or income?
- Cost: Review the interest, fees, collateral, and total amount due over the life of the contract.
- Cash flow: Can you make the payments after essential expenses, and how would you cope if your income fell?
- Risk: If you default, could you lose property, affect a guarantor, or harm your business or family?
If you are having trouble making payments, contact the lender and ask about debt restructuring options. The Bank of Thailand says a proposal should take repayment capacity and the amount needed for living expenses into account.
Sources
- Bank of Thailand: Debt solutions and restructuring guidance
- Stock Exchange of Thailand: Investment risk and uncertainty of returns
The linked video discusses family debt. It does not distinguish between good and bad debt, so it is included as context only.
The original video is available on YouTube. This article describes the scope of the linked material and does not present it as evidence for claims about debt categories. Open the video on YouTube