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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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Steering a course through major life milestones can be akin to navigating rapids. Both are best accomplished with the right tools and can be enjoyed much more with a little preparation. Financial stressors that sometimes accompany those milestones are usually easier to manage and more likely to have a positive impact on your wallet when there’s a plan in place to handle them.

1. Look Inward—and Be Critical!

When you think about the future, are you anxious or optimistic? What’s your decision-making style? Are you someone who goes with their gut, or are you a planner? Money management is subjective and personal, so if you don’t have a good understanding of how you approach life’s big changes, you could miss the boat financially.

Think back on changes you made in the past and dig deep into how you handled them. Often, a partner or supportive friend can help you gain insight into how you engage in change and where you might get stuck as you move through the process.

2. Shine a Bright Light on Your Values

Now’s the time to really think about what’s meaningful to you. Let’s say you’d like to buy your first home. What’s important about home ownership to you? Do you need to live in a neighborhood close to work or public transit, or in a good school district for your children? Will your purchase be an investment opportunity that will provide you with greater financial stability? Maybe you’re looking to put down roots and invest in a home that’s yours instead of a rental. Make a list, focusing on your values and how you want to live your life—your goal is to determine the “why?” behind your milestone.

Recommended: Why Debt-Free Living Leads to More Happiness

3. Research

Information is critical to success. So what do you need to reach your milestone? Career advice? Help paying down student loans? Home buying advice? Legal support? Maybe you just don’t know yet, which is totally normal. Research online and consider different perspectives, but stay clear and grounded in your values. If you identify as an anxious planner, you may find yourself getting stuck in this step, or trapped in a circle of research. So pick the brains of optimists who have been in your position and who can help you make a decision and move on to the next step.

4. Strategize

How you manage your transition could mean the difference between success and failure, so you need a strategy that considers different angles and paths. For example, how will starting a business play out financially in the short term and as you move through life? Will you have to keep your day job for a while? How long? If you’d like to start a family, look now into the details of your employer’s maternity leave benefits and consider taking better advantage of your employer-matching 401(k) plan. Visualize the future you want, and then create a chart that includes various approaches to designing it.

5. Consider the Changes You’ll Have to Make

To reach your milestone, financial adjustments will have to be made. For instance, if you’re starting a new job with a better salary, you may be able to put a little bit more toward retirement and add to your emergency fund. You may not see the same people every day, so maintaining important relationships might take some extra work.

If you want to buy a home, you might have to cut spending to afford a new mortgage, so take the time to modify your budget. If you’re planning to expand your family, you’ll need to consider new expenses, including childcare and additional healthcare costs, and start saving for your child’s education. Big life shifts translate to financial modifications and can be more successful with preparation.

Recommended: Tips for College Seniors

6. Taking the Leap

Change can be scary, regardless of how gutsy you are, but with information gathered, a plan in place, and a support system surrounding you, it’s time to make a decision and take the leap. If you tend to make decisions based on gut instinct, you may stumble here and worry in retrospect about whether you made the right one. But don’t panic even if you do, because you can always make changes down the road.

7. Fine-tune When Needed

It’s a fact of life: Not everything will go according to plan. So, there will be times when tweaks are necessary. Maybe you’ll have to adjust your budget or your timeline for achieving certain financial or personal goals. Staying positive and remembering that navigating life’s milestones is all about growth will help you control the shape of your financial future, and there will always be opportunities to correct missteps.

The Takeaway

Big changes represent exciting—and sometimes challenging—times. But by being true to yourself and your values, and by understanding exactly what you need to reach your biggest goals, you’ll empower yourself to succeed on your terms. SoFi members can access experienced career coaches who can help you determine what success means to you.

A duchess once said: “You can never be too thin or too rich.” Many people would disagree with the first part, but very few would argue with the second. However, while you can’t have too much money, you might have too much cash.

How much cash should you have?

Starting a family, or even starting to think about it, is an incredible stage in life. But it can also be overwhelming. You might be thinking about the hard questions: What will your life be like with a newborn? What will you and your partner be like as parents? Should you move closer to family?

Life, interrupted. That’s what millennials with student loans are discovering as they try to meet their financial goals, such as buying a home.

But there’s a way to eliminate that debt faster. Refinancing your student loans to reduce interest rates is a strategic move savvy borrowers are making to save money over the life of their loans. Then they can turn their attention to saving for retirement and improving their quality of life.

We talked to three of our members, each with a different set of life circumstances, who were tired of putting their dreams on hold. For James Hilton Harrell, Melonia Bennett and Josh Grant, refinancing their student loans with SoFi has help put them on the path to a brighter financial future.