How to Leverage Debt to Build Wealth: 7 Tips 

You’ve probably been told that debt is bad. Like, “avoid it at all costs” bad. But what if we told you that the right kind of debt—used the right way—could actually help make you richer? That’s not just financial fantasy. It’s a real strategy, and people use it every day to help build credit, grow businesses, and buy homes that become lifelong assets.

So if you’re ready to learn how to leverage debt like a financial rebel with a spreadsheet, you’re in the right place.

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1. Build your credit 🧾

You can’t run until you can walk, and in the world of leveraging debt, that means starting with your credit score.

If your score isn’t above 740 yet, consider options like credit-builder loans or becoming an authorized user on someone else’s card. Even rent reporting services can help you build a stronger credit profile.

MoneyLion’s Credit Builder Plus membership* can help with that process. It’s not just a membership — it’s a strategy. The membership gives you access to credit building tools including a Credit Builder Loan designed to help build your credit when you make on-time payments. Payment history gets reported to all three major bureaus, helping you boost your score. And once that credit score climbs? It could help you  unlock lower interest rates, better loan terms, and way more leverage when you borrow.

You’re not just fixing credit. You’re building the foundation for a smarter debt game.

2. Aim for low interest rates 📉 

Once your credit’s in better shape, it’s time to get serious about interest rates. High interest? That’s the silent killer of wealth.

Call your lenders and ask for a lower rate. If they say no, don’t sulk — shop around. Look into personal loans with better terms, or roll high-interest credit card balances into a debt consolidation loan. That’s how to make debt work for you instead of the other way around.

3. Invest in your education 🏫

Let’s be honest: student loans get a bad rap. But when used strategically, they can be a form of leveraging debt to build wealth. It all comes down to ROI.

That means not just getting a degree, but getting one that leads to higher earnings. And don’t sleep on trade schools or certification programs—they’re faster, cheaper, and can open doors just as wide as traditional colleges.

Bottom line? Smart student debt can pay for itself. That’s the power of leverage.

4. Take on a home mortgage 🏠

A mortgage isn’t just a monthly bill. It’s one of the clearest examples of how to leverage money to turn debt into an asset.

With every payment, you’re buying more of your home. Over time, that equity typically grows — and if property values rise, you could end up with a major wealth-building machine.

5. Invest in high-yield assets 📈

Think big. Like investment properties or index funds. These assets can generate passive income and long-term growth (but, of course, there is also the risk of a loss). But yes, they often require upfront capital — which is where leveraged debt comes in.

Some investors borrow to purchase real estate. Others use margin loans to invest in the stock market. Just don’t do this without a rock-solid plan and a high tolerance for risk. Seriously.

Want to test the waters without diving in headfirst? Start with small investments or consider MoneyLion’s investment tools to build up your know-how.

6. Start or grow a business 💰

Ever heard the phrase you’ve got to spend money to make money? It’s cliché — but when it comes to business, it’s kind of true.

Starting or scaling a business is one of the boldest examples of using debt to build wealth (as well as how to leverage credit to build wealth). A business loan can fund everything from new products to payroll to a shiny second location. But don’t take on debt blindly. Know your numbers, project your revenue, and map out how and when you’ll break even.

This is how entrepreneurs use debt to move from “great idea” to “profitable company.”

7. Take advantage of tax deductions 👛

If you’re self-employed or run a business, your debt could be working overtime — as a tax deduction. That’s right: in many cases, interest on business loans is tax-deductible.

Speak with a CPA or financial advisor to see what qualifies. You may be able to lower your taxable income just by keeping good records and knowing what counts.

Learn more about tax write-offs and filing basics.

What qualifies as debt?

You already know what debt feels like — but here’s a breakdown of what it actually includes:

• Secured debt: Backed by collateral like a house, car, or savings account. Think mortgages or auto loans.
• Unsecured debt: No collateral. Credit cards and student loans fall here.
• Revolving debt: Credit lines you can borrow from repeatedly, like credit cards or HELOCs.
• Mortgages: Technically secured debt, but big enough to deserve its own category.

Understanding these categories is key to leveraging debt wisely.

How does asset leverage work? 

Let’s break it down.

When you borrow money with the goal of using it to grow wealth or acquire assets, that’s debt leverage in action. It’s the financial version of judo — using borrowed funds to your advantage.

A few examples of leveraging assets or debt to build wealth:

• A mortgage that gains value over time
• A low-interest loan used to consolidate higher-interest debt
• A loan for a small business
• Business financing that leads to new revenue
• Buying into leveraged investments, like ETFs

But be warned: this only works when the returns outweigh the risks. If not? You’re just playing with financial fire.

Advantages and disadvantages of leveraging debt

Let’s get real about both sides of the coin.

Pros:

• Amplifies buying power
• Can potentially lead to higher returns (on assets or investments)
• Helps grow businesses and build credit
• May unlock tax deductions

Cons:

• Risk of overextending yourself
• Missed payments can tank your credit score
• High-interest debt can snowball fast
• Asset values don’t always go up (ask anyone who bought a house in 2008)

Using debt leverage means being strategic, not reckless. Don’t borrow unless you’ve run the numbers — and have a plan.

Ready to Use Debt Smarter?

Debt isn’t the enemy. Used right, it’s your financial sidekick — quietly helping you build credit, buy assets, and boost your earning potential. From mortgages and student loans to business lines of credit, leveraging debt to build wealth is all about control.

So instead of fearing debt, start thinking about how to make money with debt. That’s the real flex.

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