<prompt> Human: I have always heard from elders that getting loans and paying off is better than paying with reserves but I dont completely understand why.For e.g: If I can afford to pay for grad school without taking up loans, the advice given is to better take loans and pay it instead of putting your own money.Can someone please ELI5?  <response>: For e.g: If I can afford to pay for grad school without taking up loans, the advice given is to better take loans and pay it instead of putting your own money.That is not very good advice. Unless the interest rate is exceptionally low - to the point where you can have a reasonable expectation of having your money grow faster elsewhere - you should just pay the bill outright. 